What is a revocable trust?
The word “revocable” of a revocable trust means that the trust can be withdrawn, canceled, or changed while you are alive. You maintain control and flexibility. The “trust” is like a separate legal entity.
Why avoid probate?
The probate process is timely and expensive. The court must determine whether there is a valid will and enforce it, and if there is no valid will the court must locate heirs and distribute the decedent’s assets. The process involves attorney’s fees (as a percentage of the estate) and administrative fees.
How does a trust avoid probate?
First, understand that all your property must pass through probate when you pass away, except under certain circumstances, such as when you have a named beneficiary on an account. When you use a trust, however, a different entity holds legal title to the assets you transfer to it – not you! The trust lives on, even after your death. Therefore no probate is required of trust assets.
Does a power of attorney avoid probate?
No. In Nevada and California, a power of attorney is automatically terminated at death. Even the durable power of attorney, which is intended to stay valid if you become disabled will also automatically end at your death.
What assets should I put in my living trust?
That depends on whether you want to completely avoid probate. If so, then you should likely put everything you have in the trust. Typically a trust is “funded” with real property and other assets with formal titles (vehicles, savings accounts, stocks, etc.) Title to newly acquired property can be in the name of your trust as well. Other property such as jewelry, art, and home furnishings must be listed under a “Declaration of Intent”.
Do I lose control of the property I put into my trust?
Absolutely not. A living trust gives you full control over your assets. You simply select yourself as the trustee of your living trust, and then you can do everything you could do before. Nothing changes but the names on the titles. You even file the same income tax returns.
Is it hard to transfer property into my living trust?
No. In Nevada and California, it’s as easy as filling out a “quitclaim deed.” You can do this yourself or ask an attorney to help you record the records.
What if I’m not the only person on the title of an asset?
You can transfer whatever share you own to the trust without affecting the shares of the others.
What about my property in another state?
This can and should be put into the trust as well. If you do not transfer out-of-state property into your trust, your beneficiaries will need to have a separate probate in each state in which you own real estate.