As Californians set up their estate plans, many turn to living trusts to help them avoid the probate process. According to FindLaw, any estate worth less than $150,000 is put through a simpler process rather than the full extended probate process. A living trust allows someone to keep control of their assets and property even as they ensure that it is managed appropriately upon incapacitation or death.
The basic trust highlights the relationship between three different roles in the process. These roles can be filled by the same person if necessary.
- Trustee: this person receives the property and manages it in place of the beneficiary
- Beneficiary: the person who is entitled to the property’s benefits
- Grantor: the person who gives the property to the trustee to have it given to the beneficiary
Because this type of trust is intended for those who are still alive, the grantor can maintain the right to end the trust or change the terms in a revocable trust. An irrevocable trust cannot be amended, terminated or modified without the permission of the grantor and the beneficiary.
Setting up a living trust is a legal process in which you identify who is to receive your assets, who will manage them for you and who the alternate trustees will be. This document also identifies how to manage the assets and property if you die.
Instructions are set forth in the living trust for what should happen after you die. The assets are managed and distributed by the successor trustee or co-trustee to your designated beneficiaries. These beneficiaries can be friends, family members, educational institutions or religious organizations. Federal and state taxation laws still apply to any assets in the living trust when you die.
This information is for educational purposes and should not be interpreted as legal advice.