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Wills and Trusts

In California, if you die without a Will, you are considered “intestate,” and a legal process in the probate court is required to determine who should receive your assets.  If you have minor children, a guardian will be named for them during the probate process.  In the Sacramento area, probate is a public process, can be very expensive, and can take an average of two years to complete.

Even if you have prepared a Will, your estate will have to go through the probate process.  An exception exists for “small estates,” i.e., estates with less than $150,000 gross value.  Probate costs are based on the gross value of the estate, not the net value after payment

The advantage of a probated estate is that the person left in charge of your estate (your Executor), is supervised by the court, and is required to give proper notice to all persons who have an interest in your estate.

A Revocable Trust, sometimes called a “Living Trust,” is a method of holding property during your lifetime, and which provides a private, less expensive process to pass your assets to your heirs.

The major advantages of a Living Trust are that it: 

  1. provides for management of your assets during any periods of incapacity;
  2. may provide better opportunities for tax planning;
  3. avoids probate; and
  4. can protect your assets from the “predators and creditors” of your surviving spouse and your children.

A disadvantage of using a Living Trust is the lack of court supervision.  If you do not have a trustworthy “Successor Trustee” (the person who takes over after you are disabled or deceased), the lack of court supervision makes it relatively easy for a trustee to abuse his or her powers by self-dealing or converting trust assets to his or her own use or benefit.

Other potential problems may limit the effectiveness of the Trust.  A poorly drafted Trust may require court intervention to interpret the Trustmaker’s intentions, to undo provisions that may be disadvantageous from a tax standpoint, or to make other modifications if problems are discovered when the Trustmaker no longer has the mental capacity to amend the Trust.

You should consult with an attorney qualified and experienced in estate planning to determine what estate planning vehicle is right for you.

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2355 Gold Meadow Way, Suite 143, Gold River, CA 95670
| Phone: 916-729-1307

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