Trusts
A Living Trust is a Revocable Trust – the terms are interchangeable, and they mean that this is a trust that can be amended by the Settlor(s) – the person(s) who created the trust – you.
Living Trusts are separate legal entities capable of owning property. As such, you can place your property into the Living Trust and that property can be managed by you, for your benefit allowing you to enjoy all the fruits and benefits of owning the property while ensuring that your property will pass to those that you wish, when you wish, receiving step-up in basis where appropriate and avoiding probate proceedings.
The Living Trust also provides management plans should the Settlor become incapacitated. The Successor Trustee can step in to act on behalf of the Settlor. This ensures that you have a person whom you have faith and confidence in making decisions for you; not someone appointed by the Court or someone you would not have chosen if you were able.
Upon your passing the Living Trust will organize and distribute your property to whom you want when you want. Clients often send their property to their children, although this is not always the case. Sometimes these children are young or immature and will need help to manage their new inheritance. You make the choices under your Living Trust.
The Living Trust avoids Probate Proceedings. A Probate Proceeding is required when a person dies, owns property in their own name, and such property has a greater gross value than $61,500 for real property and/or $184,500 for personal property. When the Living Trust owns the property, you do not and if you do not, then a Probate Proceeding is physically impossible.
Many high-net-worth clients wish to ensure that they have taken advantage of all the tax-saving measures available to them. This may come in the form of a Credit Shelter Trust, often referred to as an A-B Trust. These tax-saving principles are incorporated into the Living Trust.
If you are an adult who owns their own home; if you are a parent or grandparent; if you wish to make decisions for yourself regarding the management of your financial affairs, then you need a Living Trust.
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Frequently Asked Trusts Questions
What exactly is a Living Trust and why do I need one?
A Living Trust is a legal entity that holds and manages your property while you’re alive and distributes it according to your wishes after death. It helps avoid probate proceedings, provides incapacity planning, and gives you control over how and when your assets are distributed. You particularly need one if you own a home, have children or grandchildren, or want to maintain control of your financial affairs.
How does a Living Trust protect me if I become incapacitated?
A Living Trust allows your chosen Successor Trustee to immediately step in and manage your affairs if you become incapacitated. This ensures someone you trust—rather than a court-appointed stranger—makes decisions about your property and finances. The transition is seamless and avoids the need for court intervention.
Can I change my Living Trust after it’s created?
Yes, you can modify your Living Trust at any time while you’re alive and mentally competent. As a “revocable” trust, you maintain full control to amend terms, add or remove assets, or change beneficiaries as your circumstances change. This flexibility ensures your trust continues to meet your needs over time.
What’s the difference between having a Will and a Living Trust?
A Living Trust helps avoid probate while a Will must go through probate court. With a Living Trust, assets transfer privately and typically more quickly to beneficiaries. In California, probate is required for estates with real property over $61,500 or personal property over $184,500. Living Trusts also provide immediate asset management if you become incapacitated.
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