Avoid Probate Effectively
A trust is a contract or agreement that creates a legal ownership structure to hold assets for the benefit of designated beneficiaries and dictates the details for asset distribution. Trust based estate planning is the most effective way to avoid costly, lengthy and public probate.
Revocable Living Trust
The most common trust and estate planning solution is a revocable living trust. It is also sometimes referred to as a living trust or revocable trust. It is created and in effective when the trustor is alive (living) and allows the trustor to make changes to it (revocable). With a revocable living trust, you, the trust maker maintain full control in your lifetime. You can do anything with your assets as you would have done before creating the trust. It does not change how you execute, make decisions or live your daily life.
The main benefit of a revocable living trust is to pass assets from generation to generation without going through the costly, time-consuming and highly public probate process. Because the trust owns the assets, probate is not necessary to transfer the assets after the client dies. This means that your beneficiaries can receive assets in a timely, cost-effective, and private fashion.
An individual or separate revocable living trust is established for a single person. A married person may also elect to create an individual or separate revocable living trust. A joint revocable living trust a typically established for a married couple. For married clients in California, a joint revocable living trust is mandatory to maintain community property status and the favorable tax treatment that follows.
A Pour-Over will is a key component when you have a trust-based estate plan and has the same components as a basic will, but this special type of will specifically lists your revocable living trust as the beneficiary. Although the intent of having a revocable living trust is to avoid probate, if we come across accounts or property that were not transferred to your trust during your lifetime, making probate necessary, a Pour-Over will ensure that those accounts or pieces of property transfer to your trust at your death and go to those individuals or charities you have named in your trust document.