San Mateo Revocable Living Trusts Attorney
Does my family need a revocable living trust?
It’s a question that many San Mateo families find themselves asking once they begin the process of estate planning.
Trusts often have the connotation of being a tool for the very wealthy. While the truth is that not every family needs a trust, for those who own their home, have young children, or who are concerned about maintaining their privacy, a revocable living trust can be a viable estate planning option with significant benefits.
Creating a revocable living trust is less about “wealth” and more about understanding the assets you possess, your family dynamics, and your long-term estate planning goals.
Contact the Law Office of Vidhya Babu to discuss how a San Mateo revocable living trust attorney can help your family explore your estate planning options and help you confidently build a plan that meets your family’s needs.
What Is a Revocable Living Trust?
A revocable living trust is a type of legal arrangement commonly used in estate planning. It provides a way to hold and manage property during a person’s lifetime, while also providing for its distribution after death.
In a revocable living trust, the grantor is the person who creates the trust. The grantor funds the trust by transferring title to property to themselves, in their capacity as trustee. In most cases, the grantor, the initial trustee, and the beneficiary are the same person. Other beneficiaries can be named who will receive trust property when the grantor passes away.
As the initial trustee, the grantor remains in control of the property placed into the trust during their lifetime. A successor trustee is also named who will take over management of the trust once the grantor passes away or becomes incapacitated. After the grantor’s death, the successor trustee handles the management and distribution of trust property to the beneficiaries, according to the terms laid out in the trust.
The trust is called revocable because the trust’s creator, known as the grantor, settlor, or trustor, retains the ability to add or remove assets, and even revoke the trust as long as they have the legal capacity to do so. By comparison, in an irrevocable trust, assets generally cannot be removed or the trust itself dissolved after it has been created.
When set up properly, a revocable living trust can be a powerful tool for managing an estate during one’s lifetime, and leaving highly customizable plans for distribution to beneficiaries.
Who Owns the Property in a Revocable Trust?
A common question is “who owns the property in a revocable trust?”
Legally, the trustee holds title to assets that have been transferred, or funded, into the trust. However, that doesn’t mean that you are giving up control over your property by titling it to the trust.
As the initial trustee of a revocable living trust, you can generally continue to control and manage the property held in the trust. You can continue living in your home, sell it, buy additional properties, manage any investments transferred to the trust, as well as amend and even revoke the trust.
That flexibility is one of the most attractive features of a revocable living trust.
Who Can Benefit Most From a Revocable Living Trust?
One of the biggest misconceptions we hear about trusts is that they are only for the very wealthy.
While it’s true that not every family needs a trust, whether you consider yourself to be wealthy or not, a trust can offer significant benefits for San Mateo and California families.
Homeowners may be particularly good candidates for a revocable living trust, especially in the Bay Area, where home owners often have substantial equity in their homes. Properly transferring your home and other assets into a trust allows you to continue to manage them during your lifetime, while allowing those assets to pass outside probate after you pass away.
The California probate process is both timely and expensive, particularly when there is valuable real estate involved. Skipping that process can be both a money and timesaver for your beneficiaries.
Parents with children can also benefit from establishing a trust. Trusts allow them more control over inheritance distributions than a will, which can prevent a child or young adult from receiving everything outright once you pass away.
Blended families, those that combine children from previous relationships, may also be able to take advantage of the more detailed planning options available in a trust.
Business owners, people with significant investments, and families with beneficiaries who have special needs may also benefit from specialized trust planning.
What Are the Benefits of a Revocable Living Trust?
For San Mateo residents, establishing a revocable living trust offers several potential benefits over a standard will.
Avoiding Probate
When a person leaves assets such as a home or other property to beneficiaries through a will, those assets must first pass through a process called probate before they can be distributed. Probate is a court-supervised process that can involve court filings, notices to creditors, waiting periods, and attorneys’ fees. That process can take months or longer before a beneficiary receives their inheritance.
On the other hand, assets that have been properly titled into a revocable living trust are managed and distributed outside of the probate system by the successor trustee.
Because trust assets generally do not have to pass through probate, administration can involve less court involvement and may take less time than probate.
Incapacity Planning
When properly funded, a trust can provide an opportunity to ensure continuity for your family should you become incapacitated for a period of time. While a will becomes effective only upon death, a revocable living trust can designate a successor trustee who can step in to manage properties, bank accounts, and investments that have been funded into the trust. However, because a trust generally only covers assets that have been transferred to the trust, a comprehensive incapacity plan should consider a durable power of attorney for assets that remain outside of the trust.
Privacy
A revocable living trust offers significantly more privacy for families than a will. Because probate proceedings are generally matters of public record, information about an estate can become publicly accessible. A properly funded revocable living trust can allow trust assets to be administered and distributed to beneficiaries privately, outside of the probate process.
Greater Control Over Asset Distribution
Trusts can provide far more detailed instructions for distributing assets than is possible in a will. A trust can be structured to distribute inheritances to beneficiaries at certain ages, or when certain conditions have been met. Trusts can also provide for minor children or a surviving spouse.
The additional level of control over asset distribution can be particularly helpful for blended families, beneficiaries with special needs, or other more complex family situations.
Flexibility
By creating a revocable living trust, the grantor retains a significant level of flexibility and control over their assets. As long as the grantor remains alive and has the legal capacity to do so, assets can generally be added or removed from the trust. Unlike an irrevocable trust, the trust itself can even potentially be revoked if the grantor chooses.
Will vs a Revocable Living Trust
Clients often come to the Law Office of Vidhya Babu interested in establishing a revocable living trust, but already have a will in place. The important thing to understand is that they are not necessarily competing documents, but can in fact complement each other.
A will controls what happens to the assets of your estate upon death, but it doesn’t account for management or distribution of property while you are still alive. For parents of minor children, a will can also allow them to nominate a guardian if they pass away while their children are still underage.
In contrast, a revocable living trust can provide for management of assets that have been properly transferred into the trust both during your lifetime and after death.
Some individuals choose to use both a trust and a “pour-over will” as part of a comprehensive estate plan. Assets that have been properly transferred to the trust can be distributed without probate, while assets that are not part of the trust can pass through the probate estate. Some types of assets, such as life insurance policies, may use beneficiary designations or other arrangements. A pour-over will can provide a sort of safety net that provides a backup for certain assets outside the trust. Those assets can then be transferred to the trust through probate after death.
How a San Mateo Revocable Living Trusts Attorney Can Help
Establishing a revocable living trust is a significant decision. To ensure you make the best decisions for your family, consider consulting with a San Mateo revocable living trust attorney.
At the Law Office of Vidhya Babu, our goal is to get to know our clients’ family situations before making a recommendation. Understanding what assets you own, how they are titled, and who you want to benefit when you pass away are important factors that go into creating the ideal estate plan. We can also discuss what happens if you become incapacitated, so that your family won’t be left unable to take action or have to make difficult decisions without guidance.
Our team can help you:
- Draft a revocable living trust
- Select a trustee and successor trustee
- Coordinate with an existing will
- Create other important estate planning documents, such as an advance health care directive or durable power of attorney
- Review asset ownership
- Update your estate plan when major life or financial changes occur
Whether you’re creating your first estate plan from scratch or building upon a will or other existing estate planning documents, establishing a revocable living trust can provide your family with flexibility both during life and after you’re gone.
Contact the Law Office of Vidhya Babu today to schedule an initial consultation. We can help you understand your options and build a plan that makes sense for your needs.
San Mateo Revocable Living Trust FAQs
Living trusts can be either revocable or irrevocable. A revocable living trust generally gives the grantor the ability to change or revoke the trust as long as they are alive and have the legal and mental capacity to do so. Irrevocable trusts generally limit the grantor’s ability to amend or revoke the trust, although some can be modified under specific circumstances. Contact the Law Office of Vidhya Babu to discuss which type of trust can benefit your family.
Planning for incapacity lets your family and loved ones take action quickly when needed, and avoids unnecessary delays or complications that can occur without planning
When a property is titled or transferred into a trust, the homeowner isn’t simply “giving away” the house. Legally, the trustee holds the legal title to the property. In most cases, the initial trustee is the person who creates the trust. The grantor retains control over the property and can continue to live in it, manage it, and sell it subject to the terms of the trust.
Generally speaking, no. A home can be transferred into a trust, even if there is an active mortgage. You’ll continue to be responsible for your mortgage payments.
After the grantor of a revocable living trust passes away, the successor trustee generally takes over management of the trust and follows the instructions in the trust document. Depending on how the trust is structured, the trust may become irrevocable at that point.
One of the major benefits of a trust structure is that properly funded trust assets can be distributed and administered outside of probate. Any assets not properly transferred or otherwise coordinated may still be subject to probate.
Creating the trust documents is only the first step in the process. Assets must be properly titled or transferred to the trust for the plan to work. The specific items placed in the trust will depend on your personal and family circumstances and wishes.
However, some commonly transferred assets include homes, secondary or investment properties, certain financial or investment accounts, or certain business interests. A San Mateo revocable living trust lawyer can advise you on what assets make the most sense to fund your trust with.
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