I came across this very interesting and well written article in the Los Angeles Times Personal Finance Section. It is written by a financial planner and personal finance columnist. She answered a question from a couple with a modest estate who were wondering whether it was advisable to have a living trust. She explained that living trusts allow estates to avoid the court process known as probate that typically oversees paying a deceased person's creditors and distribution of assets to heirs. When a person's estate is small (under $150,000) probate is not usually necessary or a streamlined process applies. However, an estate over $150,000 may need to go through the lengthy and costly probate process. In which case, an estate plan including a simple living trust may be prudent.
A lot of people could benefit from having a living trust, especially if your assets are over the $150,000 "small estates" threshold. It could save your estate a significant amount of money as well as keep the details of your estate and extent of your assets private. Bear in mind that some assets pass to beneficiaries outside of probate. For example, money in a 401(k) will pass directly to the named beneficiary. There are other "transfer of death" accounts that will not be part of the probated estate.
If you have any questions or concerns about creating a living trust, schedule an appointment with one of the attorneys at the Law Office of Thomas E. Malley. You can call us on 805 482 2199, send us an email to [email protected] or click here to send us a message.