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You do not have to choose one or the other. In estate planning, it is best to cover all your bases. You can choose to have a Last Will and Testament (“Will”), a Revocable Living Trust (“RLT”), or both.
The Will allows you to specify how your assets will be distributed. For example, if you intend to leave your condominium unit to your eldest child, you can specify that in your Will. Your Will can also contain instructions and wishes regarding your funeral and burial.
A RLT, on the other hand, allows you to establish specific conditions regarding the transfer of your assets. For example, you can set up a Trust for your minor child, who will get an allowance of $2,000 each month until they complete their undergraduate education. However, you will have to transfer cash assets into the name of the Trust first.
Probate is a court proceeding where a Will’s authenticity will be validated. A judge will review the purported Will and ensure that it is indeed created by the testator (the person who died) and that the Will was prepared following the requisites provided by law.
In California, a Will must be signed by the testator, and there must be at least two witnesses for it to be valid. The signing must also be done in each other’s presence. The Will does not have to be notarized.
Probate is necessary if the decedent executed a Will. Probate may be required if the decedent passed without a Will.
If your Will applies to a given asset, then distribution of that asset to your intended heirs will be delayed by the probate process. Depending on what happens during the probate process, a given asset may not ultimately be distributed as you intended.
A RLT, however, does not have to be probated. Assets placed into a RLT therefore bypass probate, allowing them to be transferred to the intended beneficiary much more quickly and without interference—according to the terms of the Trust.
A Revocable Living Trust (RLT) is a popular way to transfer assets to beneficiaries in a way that avoids the long and expensive probate process that applies to items in a Will.
To fund a Trust is to place assets into that Trust. This is a step that needs to take place with assets after the Trust is drafted, and it causes the terms of the Trust to take effect upon a given asset. If you do not fund the Trust, then the terms you have drafted will not take effect upon the assets you have chosen for that Trust. It is therefore important to follow up and fund your Trust with the appropriate assets and the terms of the Trust in mind, according to your strategy and intentions.
There are many types of trusts, and they can be either revocable or irrevocable. While a revocable Trust is designed to allow you to modify the assets in the Trust after they have been placed in that Trust, an irrevocable Trust does not allow the grantor (the creator of the Trust) to have access to assets after they have been placed in the Trust. An RLT is revocable, allowing its assets to be modified or removed during the life of the grantor. An RLT becomes irrevocable upon the death of the grantor.
Yes. There is no minimum amount of assets required before anyone can make a Will. In order to create a Will in California, you must be 18 years of age and of “sound mind”.
Any prized possession can be designated to an heir or beneficiary through a will. For example, a treasured family heirloom and a toy or stamp collection can be bequeathed to a specific heir or beneficiary in your Will.
It is recommended you update your Will in certain instances to ensure your Will still reflects your wishes.
An example of an event that would require you to update your Will is the acquisition of new properties. You might also want to review your Will when there are changes in your family dynamics. This could be after having a new child, in the event of a divorce, or when there is a death in the family.
No. The executor of your Will does not have to be a relative or family member. Traditionally, most people choose a close family member to be their executor. However, choosing a trusted friend is also acceptable.
Intestacy is the term used when a deceased person has left no Will. A person dies intestate when they pass without a Will.
When one has died intestate (without a will), the assets of the decedent will be distributed among the legal heirs. The preference, shares, and portions will be determined by the laws of the state.
In California, the laws of intestate succession are pretty straightforward. For instance, the assets would be divided among the decedent’s spouse and children, and their proportional shares would depend on the number of children.
If the decedent has no children, the assets will go to the surviving spouse. Without a spouse or child, the assets will go to the parents. If the parents are no longer around, the assets will go to the surviving siblings.
If the decedent has no legal heirs, the assets will be absorbed by the state (escheat).
If you have more questions about Wills, Trusts, or estate planning in general, call Anthoor Law Group at 510-794-2887 to book a consultation.
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