If you own assets in California, establishing a revocable living trust can help your estate avoid the court-supervised probate process after death. Understanding exactly how these trusts allow assets to bypass probate can help you evaluate if a trust-based estate plan suits your situation.
What is Probate?
When someone passes away owning assets solely in their individual name without co-owners or designated beneficiaries, those assets must transfer through probate. Probate is a legal process supervised by the California probate courts to validate the will, inventory and appraise assets, settle debts and taxes owed, and distribute the remaining property to beneficiaries under the will’s terms.
Why Avoid Probate with a Trust?
Probate is a public record, unlike the privacy of trust documentation. The process also has downsides making avoidance desirable:
Delays Probate can tie up assets for a year or longer, delaying access for beneficiaries depending on estate complexity. Funds may be needed to support loved ones.
Fees In California, probate costs typically range from 4% to 7% of the gross estate value, paid from asset proceeds before distribution to heirs.
Court Oversight The probate judge must approve various transactions, appoint appraisers, audit assets, and authorize distributions. This court involvement intrudes on privacy and control.
Challenges Disgruntled heirs can contest the validity of the will and raise other claims lengthening the probate process and depleting assets.
How Trusts Help Avoid Probate During your lifetime, you transfer owned assets like real estate, financial accounts, and investments to the named trustee of your revocable living trust. You can name yourself the initial trustee retaining control. On death, the successor trustee you previously designated then distributes assets directly to beneficiaries per the trust terms, sidestepping the probate process completely since court validation is unnecessary.
The type of assets owned determines whether probate can be avoided. Non-probate assets with beneficiary designations like retirement accounts and life insurance will bypass probate automatically. Trusts address the disposition of remaining “probate assets” that require court procedures to change ownership.
Is a Trust Right for You?
Just having a will does not avoid probate. Weighing the upfront expense of creating a living trust versus thousands in probate fees later can make trusts advantageous. For large estates, privacy concerns, out-of-state real estate interests, or blended families with beneficiary disputes, avoiding probate through trusts merits strong consideration. An experienced estate planning attorney in California can help determine if a trust achieves your specific goals.
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