California Living Trust Information
A living trust allows you to direct the management and distribution of your assets during your lifetime. You may consider creating a living trust if you have a sizable estate, own a business or are concerned about what would happen to your assets in the event that you become incapacitated. If you're a resident of California, it's important to consider the legal aspects of establishing a living trust and what financial benefits it may offer.
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Establishing a Living Trust
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A lawyer specializing in estate planning can help you establish a living trust. Creating a living trust in California typically involves two steps. First, you must draft a legal document outlining the details of the trust. Second, you must fund the trust by transferring your assets to the control of the trustee. If you're transferring real estate, you must provide the trustee and your attorney with copies of the deed. You can also transfer bank accounts, stocks, certificates of deposit or bonds into a living trust. You may also consider changing the beneficiary of any life insurance or qualified retirement plan to the trust.
Role of the Trustee
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The trustee is responsible for administering the trust and overseeing control of your assets. In California, you may serve as your own trustee with a successor trustee assuming control in the event that you become incapacitated or die. You may appoint your spouse, adult child, domestic partner, family friend, business associate or financial professional to serve as trustee. The trustee is bound to manage your estate according to your specific instructions and he is prohibited from using any of your assets for his personal benefit without your express consent.
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Living Trust Benefits
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One of the primary advantages of a living trust is that it can help you to bypass the probate process. Any property or assets included in the trust do not have to go through probate, meaning they are distributed to your beneficiaries much more quickly. In addition, the contents of a living trust do not become part of the public record, ensuring you and your beneficiaries privacy. If you have minor children, a living trust allows you to set aside money for their future use and/or appoint a guardian for their care. If you become ill or incapacitated, a living trust prevents your assets from being mismanaged.
Considerations
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Establishing a living trust can be costly and it may not be useful if you have few assets or no dependents. If you own any property that is not transferred to the living trust, you will need to have a separate will to distribute these assets. A durable power of attorney allows you to manage any assets not included in the trust during your lifetime.
Warning
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The California Office of the Attorney General warns residents to be aware of living trust mills, which operate solely to defraud consumers. These scams typically target senior citizens with sales agents using false or misleading information to convince them to purchase a living trust, annuity or other financial products without warning them about withdrawal penalties or potential investment risk.
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References
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