Frequently Asked Questions
How does a revocable living trust avoid probate?
If your assets are funded into a trust during your lifetime, then those assets would not need to be probated after your death.
What is probate?
Probate is the court-supervised process of inventorying all of your assets after your death, paying your final bills, and then distributing what’s left to your loved ones. The key here is that probate is “court-supervised.” In other words, probate is dictated by the probate laws of the state where you live at the time of your death and can tie up your property for months or even years before your family will have access to it.
What is the cost of probate?
In California, the average cost of probate is approximately 2-4% of a person’s estate.
Is a will sufficient?
One of the biggest drawbacks of using a will to distribute your assets is that the property must go through probate before the asset is distributed to your family. Most counties have 1-2 probate judges serving over a million residents. Thus, probate is a costly and time-consuming process which can often take years before the assets can be finally transferred to the family.”
What is a revocable living trust and why do people choose to have it?
A revocable living trust allows you to: (1) control your property while you are alive; (2) designate the person of your choice to manage you and your finances if you become mentally disabled; and (3) list your instructions to your loved ones as to what to do with your assets after you die.
The primary benefit of a revocable living trust is that your family will be able to gain virtually immediate access to your assets after your death since property held in the trust will avoid court-supervised probate.
What is an Advance Health Care Directive and where can I find more information?
An “advance health care directive” lets your physician, family and friends know your health care preferences, including the types of special treatment you want or do not want at the end of life, your desire for diagnostic testing, surgical procedures, cardiopulmonary resuscitation and organ donation.
By considering your options early, you can ensure the quality of life that is important to you and avoid having your family “guess” your wishes or having to make critical medical care decisions for you under stress or in emotional turmoil. For more information, visit http://ag.ca.gov/consumers/general/adv_hc_dir.htm.
What is a financial power of attorney?
A financial power of attorney allows you to choose someone to manage your assets on your behalf if you are unable to do so for yourself. If the power of attorney is a “durable” one, then this means that the person you choose would have the immediate ability to take care of your property and would continue to be able to take care of it even if you are determined to be mentally incapacitated. If the power of attorney is a “springing” one, this means that the person you choose would not be able to manage your assets until after you have been determined to be mentally incompetent.
How do you fund assets into a trust?
For bank accounts and real estate, your name will be taken off of the asset and the name of your trust will be inserted in its place. Once the trust is fully funded, your trust will own your assets and property owned by a revocable living trust does not need to be probated after your death. Instead, the trust property would pass immediately and directly to your loved ones.