What is a living trust?
It is a written legal document that partially substitutes for a will. With a Living Trust, your assets (your home, bank accounts and stocks, for example) are put into the trust, administered for your benefit during your lifetime, and then transferred to your beneficiaries when you die.
How are assets put into the living trust?
Once your trust has been signed, an important task remains. To avoid court-supervised conservator-ship proceedings or the probate process at your death, your assets must be
transferred to the trustee of your living trust. This is known as funding the trust. Deeds to your real estate must be prepared and recorded. Bank accounts, stock and bond accounts or certificates must be transferred as well. These tasks are not necessarily expensive, but they are important and do require some paperwork.
Should everyone have a living trust?
No. Young married couples without significant assets and without children, who intend to leave their assets to each other do not need a living trust. Other persons who do not have significant assets and have very simple estate plans also do not need a living trust. The greater the value of your assets (particularly if you own real estate), the greater the need for a living trust. Regardless, a living trust could be important in the event of an accident or sudden illness.
If I have a trust, do I still need a will?
Yes. Your will affects any assets that are titled in your name at your death and are not in your living trust or some other form of ownership with a right of survivor-ship. If you have a living trust, your will would typically contain a pour over provision. Such a provision simply states that all such assets should be transferred to the trustee of your living trust after your death. Your will can nominate guardians for your minor children as well. Any assets held in a trust for your children would still be managed by the trustee.
*This is not legal advice. Consult a lawyer if you have a specific legal problem.
*Excerpts taken from State Bar of California, Office of Media and Information Services pamphlet on