Avoiding the possibility of probate is one of the main draws of a living trust in California. However, a living trust isn't a foolproof way to avoid probate. A probate lawyer may still become a requirement. Here's what you should know.
How a Living Trust Works in California
A living trust allows someone to transfer assets into a trust while alive. After death, a trustee will treat the trustor's assets according to the terms dictated by the living trust. For example, they might continue managing the assets or distribute the assets to beneficiaries. A living trust can help estates avoid probate as well as lower or eliminate some estate taxes.
How an Estate With a Living Trust Can Still Go Into Probate
Despite having a living trust, an estate can still end up in probate for a number of reasons. Here are some of the more common reasons.
The Assets Didn't Make It to the Trust
A trustor must transfer assets to the living trust or dictate certain assets will go to the trust at some point. It's possible to miss or overlook some assets. Only those assets in the trust can avoid the probate process.
Many people don't realize they must literally give their assets over to the living trust. Including a list of assets with the trust document doesn't mean those assets are in the trust. Assigning assets to the trust requires paperwork and actual transfer of ownership.
For example, if a house or other property is to go to the trust, then the trustor must sign the deed over to the trust. That applies to everything that will end up in the living trust.
Anything that doesn't receive official transfers to the trust will go through probate. By California law, assets outside the living will with a combined value of $150,000 go into probate, no matter what.
The Estate Lacks a Qualified Trustee
Trustors typically play the role of trustee while they're alive. They will pass trustee duties on to a successor trustee while alive or to someone named to take up the duties when they die. Sometimes things can go wrong with this process.
For example, the trustor may never name a successor. Or the trustor can name multiple successors who must act as co-trustees. If the co-trustees cannot come to any agreements, probate and conservatorship can become necessary. Additionally, conservatorship can occur if the trustee loses their mental capacity before they name a successor.
The Assets Weren't Indicated in the Will
It's possible for a will to indicate assets go to a trust after death. The will would then work as a safety net for assets missed or assets overlooked while the trustor lived. But if the language in the will doesn't indicate a transfer of assets to a trust, then those assets will have to go through probate.
How a Probate Lawyer Can Help
As noted, having a living trust isn't absolute protection from probate in California. If an estate goes into probate for any reason, then it's important to speak to a probate or estate lawyer. Additionally, estate planning should occur with the help of a qualified lawyer.
With legal assistance, you can plan a living trust that ties up any loose ends. A lawyer can also help with your will and other forms of protection for your assets after your passing. If you truly want to completely avoid the probate process, then you need to sit down with an estate lawyer to figure out all the details.
The Law Office of Carla D. Allen can help. We know California probate law and estate planning. If you need assistance with any aspect of estate planning or want to learn more, contact us today.
