• WHY DO I NEED A TRUST?

If you own real estate in California, then you will need a Trust to avoid Probate for your beneficiaries. A Probate usually takes 7 months to several years to complete. It also can be very costly. A Trust is the instrument that allows you to expedite the transferring of estate assets and reduces legal costs and, in many cases, gives options to the owner of the Trust as to how to distribute the Trust assets.

• DO I NEED TO FILE THE TRUST?

People can file the Trust with the courts for safe keeping. Most people do not do this. They instead keep the Trust in a safe place in their home or safety deposit box. A copy of the Trust could be given to your successor Trustee, but it must be the signed Trust to be valid.

• SHOULD I PUT LARGE BANK ACCOUNTS IN THE TRUST?

It is a good idea to put large bank accounts as well as investment accounts in the Trust as it ensures that the monies will be handled as per the terms of the Trust. If beneficiaries are noted on these accounts and if those beneficiaries pass away, then the funds may have to be probated if not in the Trust. If these large accounts are placed in the Trust, then the owner of these accounts would be the Trust.

• IS IT LEGAL TO SAY ON A TRUST THAT IF ANYONE DISPUTES THE TRUST THEY WILL GET NOTHING OR $1.00?

Yes, this is legal and is technically called a ‘no contest clause’. The purpose of the clause is to dissuade any beneficiaries from disputing their portion of the Trust and causing delays in the closing of the estate. If a person decided to dispute and was successful, he/she would still inherit. However, if he/she were unsuccessful , then the inheritance would be $1.00 or nothing.

• IF I HAVE A HOUSE IN CALIFORNIA, DO I NEED A TRUST?

Yes, if you own a home or a condo in California and wish to leave your property to your beneficiaries, then you will need a Trust (or a Living Trust) in order to avoid Probate. In California, even a Will does not avoid Probate. Probate is the court process whereby your property is transferred, upon your death, to either beneficiaries (if you have a will) or heirs (if you don’t have a will or trust). Probate can be costly and take 6 months or more. A Trust is a quick, easy and inexpensive way to insure that your property will not have to go through the Probate process. Remember, it’s a good idea to give copies of your Trust to your beneficiaries and/or trustee so that there is no confusion as to what your intentions are with your property. You will also want to keep the original in a safe place so it does not get lost. It is also a good idea to update the Trust as needed to make sure that all information is accurate.