What Exactly Is a Living Trust?
A living trust is a legal arrangement created during a person’s lifetime that holds title to certain assets on their behalf, with clear instructions for how those assets should be managed and eventually distributed. Because the trust, rather than the individual, technically owns the property, assets properly transferred into the trust generally bypass probate entirely when the person dies, saving the family both time and expense. A successor trustee named in the trust document can typically step in and manage those assets without any court involvement at all. This can matter enormously if the person who created the trust becomes incapacitated before death, since the successor trustee can step in immediately without waiting on a court proceeding of any kind.
How Does California’s Small Estate Process Compare?
California does offer a simplified affidavit process for smaller estates. Under California Probate Code Section 13100, the threshold for using this affidavit is adjusted periodically for inflation and currently sits well above $200,000 for personal property. Even so, that process still requires a 40-day waiting period, does not cover real estate, and only helps if the estate happens to fall under the limit at the time of death. A homeowner in many parts of California can easily exceed that threshold through home equity alone, long before adding in any other savings or investments.
Why Does a Trust Work for Estates of Any Size?
Unlike the small estate affidavit, a properly funded living trust avoids probate regardless of the estate’s total value, and it covers real property as easily as bank accounts. This makes a trust the more reliable option for homeowners or anyone whose estate is likely to exceed California’s small estate threshold. A Roseville living trust lawyer can help determine whether a trust makes more sense than relying on the small estate process after the fact, particularly for anyone who owns a home. Waiting to see whether an estate might qualify for the affidavit later is a risky strategy, since property values and account balances tend to move in only one direction over time.
What Does “Funding” a Trust Actually Mean?
Creating a trust document is only the first step in the process, and it is often the easier one. Assets have to actually be retitled into the trust’s name for the plan to work, which typically includes:
- Real estate deeds properly transferred into the trust’s name
- Bank and investment accounts fully retitled to the trust
- Business interests properly assigned to the trust where appropriate
- Updated beneficiary designations on retirement accounts and life insurance policies that clearly coordinate with the trust
How Do I Get a Trust Properly Funded?
An unfunded trust provides none of its intended benefits, since assets left in an individual’s own name still pass through probate regardless of what the trust document says. The team at Yee Law Group Inc. works through each asset with clients to confirm the funding process is fully complete, not just the drafting stage. A signed trust document sitting alongside untouched bank statements and an unchanged home deed accomplishes very little on its own, no matter how carefully the trust itself was written.
Should an Existing Trust Be Reviewed Periodically?
A Roseville living trust lawyer can also review an existing trust periodically to catch any assets that were never properly transferred, since a trust that looked complete at signing can drift out of alignment as new accounts and property get added over the years without anyone updating the title. A refinanced home, a new brokerage account, or a business interest acquired after the trust was signed are common examples of assets that quietly fall outside the trust’s protection.
If you have a trust that may not be fully funded, or want to set one up for the first time, reach out to our office to review your assets and your overall estate planning goals in detail.