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Properties That Are Commonly Held in Trusts 

Davidson Estate Law Feb. 9, 2023

Living Trust and Estate Planning written on paperEstate planning can be a confusing term to many because it may imply that you have to own property behind closed gates and personally be chauffeured about, but that’s far from the truth.  

Estate planning generally begins with a last will and testament, commonly referred to as a will, which allows you to designate who should receive your assets when you pass away. Assets generally include anything you possess in your own name that is not jointly held with someone else.  

In other words, if you own a car or cars in your name, a bank account in your name, a stock or bond account in your name, real property in your name, or an art or even a baseball card collection in your name, these are assets you can leave to someone else when you pass away.  

If you designate beneficiaries for your assets in a will, however, the process of delivering the assets to your beneficiaries will involve going through probate court, which in California, can take years. The common way to avoid probate court in California is to place your assets in a living trust, also known as a revocable trust. 

Estate planning is an important part of caring for your loved ones, whom you don’t want to endure the probate process to receive what you designate for them when you’re gone. The emotional and financial costs can be burdensome if they have to wait years to receive what you’ve bestowed to them. Therefore, the creation of a trust is the best route to caring for your loved ones. 

For all your estate planning needs in or around Oakland, California, contact Davidson Estate Law. We will tailor your trust and other estate planning documents to the particular circumstances of you and your loved ones according to your wishes. We proudly serve clients in Oakland as well as Walnut Creek, Berkeley, San Francisco, El Cerrito, Alameda, and throughout the Bay Area. 

Benefits of a Trust 

The major benefit of setting up a living trust as opposed to a will is the avoidance of probate proceedings in a court. A will designates a personal representative to oversee the administration of one’s estate, and that person then becomes the executor in probate proceedings. The executor is subject to the supervision of the probate court with detailed reporting requirements and waiting periods. The result is a lengthy process before beneficiaries can receive their share of the estate. 

A trust, on the other hand, allows the trustee to distribute assets quicker, although he or she must still settle outstanding tax and credit obligations before the distribution takes place. However, there are no reports or accounting that need to be given to a supervising probate judge. The process can thus proceed without administrative delays. 

Properties Commonly Held in a Trust 

When you create a trust, you will typically hold all cash accounts (checking, savings, CDs, and investment accounts), real estate, business interests, and stocks in the trust. While you’re alive and not incapacitated, you will be the trustee of the assets owned by the trust. In other words, you will still have control as you would if the assets were not in a trust.

When you become incapacitated or pass away, the successor trustee you’ve named in your trust document will take over and administer the estate according to your wishes. This, of course, includes distributing your assets to your beneficiaries when you’re gone. 

Excluded Assets

While you can place most if not all assets in a trust, assets that have named beneficiaries (such as life insurance policies or retirement accounts) will pass to the named beneficiary outside of the trust. However, in some situations it is advisable to name your living trust as the beneficiary of these types of assets. This takes complex analysis that should be made with the help of financial and legal counsel. 

Seek Trusted Legal Assistance 

Setting up a living trust is not a recommended do-it-yourself proposition. Online and television ads promote services that allow you to establish a will or trust by filling in some blanks and checking off some boxes, but the result is not always foolproof, legal-wise. Furthermore, one-size-fits-all estate plans do not take into account all possible outcomes to your specific family or financial structure, nor do they typically have an attorney available to answer your questions. Basically, you are on your own. 

For all your estate planning needs in or around Oakland, California, and the Greater San Francisco Bay Area, contact us at Davidson Estate Law. We will listen to your concerns and the needs of your loved ones and help you fashion an estate plan, including a living trust, that will provide peace of mind.