5th Feb 2013
One reason people may avoid probate is that it provides creditors a certain time to file their claims against the decedent. Whatever has been paid off to the creditors may eventually lessen whatever inheritance you wish to bequeath to your beneficiaries.
One way to go around probate and protect your property as well is to have a California probate attorney prepare a Living Trust for you. In a Living Trust, you designate a Trustee whom you authorize to administer the distribution of your property after you die. In effect, assets transferred in the Living Trust are no longer the property of the decedent but of the Trust.
Just to be clear, holding assets in a revocable trust will not protect you from having to settle your obligations in your lifetime. A creditor can still go after the trust property even if the property is no longer in your name, but under the Trust. When you die, however, all your property named in the Living Trust can be immediately and discreetly transferred to your beneficiaries.
When your creditors become aware of your death, your property may already have been distributed. Except for your real estate holdings, your creditors may not know what you own. By that time, your creditors may balk at the idea of tracking down your property and demanding the new owners to use the property to pay your bills. California law also stipulates a certain time frame by which creditors may file for their claims against a trust estate.
Given the advantages of a Living Trust, it is still prudent to prepare a back-up a Will. You need a back-up Will because it is possible that not all your assets will be transferred to your Living Trust. A Living Trust requires constant overseeing during your lifetime. You may have acquired new property shortly before your death and you may not have transferred these. You may list these new properties in your back-up Will. You may even insert a clause wherein you designate an individual to get any property that you haven’t designated to anybody else. Thus, when you die, your Living Trust and your Will has gotten “all bases covered” in transferring your property to your beneficiaries.
To ensure that your final wishes are met, you may want to consult a California probate attorney to help you prepare your back-up Will. When you die, any property which is not in the Living Trust or designated to a beneficiary in a Will may be distributed to your relatives following an order of succession mandated by the state. This is known as intestacy.
It is always good to know the benefits of a Living Trust as well as that of your back-up Will. And to get the most out of these estate planning documents, it is best for you to talk to a lawyer.