A trust is a legal arrangement in which one person, called a trustee, gives another person, called a trustee, the right to hold and use the property for the benefit of a third person, called a beneficiary. Trusts are created for many purposes, including avoiding probate, protecting assets from creditors, and reducing estate taxes.
Are you looking to create a living trust in California but need help knowing where to start? Look no further! This step-by-step guide will walk you through everything you need to do to create a living trust California.
Table of Contents
How To Create A Living Trust In California
Step 1: Assess Your Assets.
When developing an estate plan, one of the first things you’ll want to do is take an inventory of your assets. Make a list that includes all your assets, including real property and financial accounts. This will help you map out the size of your estate and begin thinking about how you want to structure it.
The next step is to decide which assets you want to move into your Living Trust. Transfer valuable items, such as real estate or financial accounts. You should not transfer assets that are easy to sell or depreciate. Be sure to avoid transferring assets that would pass directly to someone else outside of probate in the event of your death, such as retirement accounts or life insurance policies with named beneficiaries.
Step 2: Appoint A Trustee.
A trustee is responsible for carrying out your instructions regarding your trust and distributing its assets after you die. Many things should be considered when making this decision. You should choose someone you can get along with and trust to manage your estate. It is wise to appoint an alternate trustee if the primary trustee becomes incapacitated or dies.
Step 3: Designate Your Beneficiaries
Your beneficiaries are the people or organizations you designate to receive assets from your Trust after your death. Your beneficiaries are the individuals or organizations who inherit assets from your Trust. When you die, your estate will be distributed according to instructions in your will.
Step 4: Draft a Declaration of Trust
A declaration of trust is a legal document that explains who made or created the living trust and how. Declarations of trust can be simple documents, but they must meet certain requirements to be legally enforceable. Consulting an attorney can help clarify the rules concerning a declaration of trust.
Step 5: Have A Notary Witness Your Signature
The state government authorizes notaries to certify signatures on legal documents such as wills or affidavits. Notaries may work in private practice, banks, and real estate companies.
Step 6: Transfer Your Assets To The Trust
Once you’ve set up your revocable living trust, put some or all of your assets inside it by transferring them. Then sign over any financial accounts to the trustee.
If you want to keep your estate private, sign over the title of any real property after death. This will avoid the time and expense of probate.
Summary
You can use a living trust with a will to make the probate process easier for your heirs after you die. Planning a living trust in California is easy, but working with someone familiar with the process may be helpful.
