Wills and Living Trusts
A Will and a Trust are both documents that direct what happens to a person or family’s estate. The main difference between a Will and a Trust is that a Will becomes effective when someone passes away, while a Trust becomes effective when it is created (and signed).
There is a common misconception that a Will is sufficient to avoid Probate in California. If you own property over $150,000, a Trust is the best instrument to avoid Probate. If you own property under $150,000, a Will is usually sufficient.
A Will directs distribution of assets after the passing of its creator and appoints an “executor” to carry out those wishes. A Trust on the other hand, can provide for assets to be distributed during the creator’s life, or after, and it can direct the frequency and way in which those assets are distributed by the “trustee.” A trustee is the person or institution appointed to carry out the directions in the Trust.
The most common type of Trust for a family is a Revocable or Living Trust. This instrument allows the creator of the Trust to retain control during his/her lifetime. The creator of the Trust can amend and revoke a Revocable Trust during his/her lifetime.
In California, if you need a Trust, your attorney will also draft a will alongside a Trust so that any assets that are left outside of the Trust can pass into your Trust at the time of passing. This type of Will is called a “Pourover Will.”
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