Most people do not need complicated Estate Plans, but they do need to understand the different options available to them.
In California, everyone has an Estate Plan, whether they know it or not. The California Probate Code provides comprehensive default rules regarding who receives property when a person dies. These rules are known as Intestate Succession rules. Further, for Californians who own real estate with a gross value [before deducting loan balances] over $50,000, and/or personal property with a gross value over $150,000, the default rules would very likely require that the estate go through Probate, whether the person died with no estate plan, or died leaving a will.
Probate is not necessarily a bad thing. In fact, under certain circumstances, having a court supervise the payment of final expenses, valuation of assets, and distribution to heirs is a good thing. But for the overwhelming majority of families, where there is little to no risk of in-fighting that will rise to the level of litigation, Probate can become a costly and time-consuming process.
For people who would like to spare their loved ones the expense and delay of Probate, "will substitutes" are a good option. A will substitute is a document [other than a will] that will allow for the ownership of property to pass to another after the original owner dies. Joint ownership accounts and insurance policies are examples of will substitutes. For comprehensive estate planning, an estate plan that includes a living trust is usually the best choice to minimize or eliminate the chances that a person's property will have to be probated.
But avoiding probate is not the only reason for having an estate plan. A person with a properly drafted set of estate plan documents will have flexibility in managing their property, a predetermined contingency plan in case of future incapacity, and a definite plan for the orderly distribution of their assets after they are gone.
A trust is, in its most basic essence, a method of holding title to property. A living trust is a type of trust that contains specific instructions for how to distribute assets after the original owner of the assets dies. When one decides to set up a living trust, they have decided to transfer the legal title of their property from themselves as individuals, to their trust, most often with themselves as the trustee [manager] of the trust. The easiest way to understand this is to imagine a bowl large enough for all of a person's property to fit into: the trust is the bowl, and the person places their property into that bowl. Since trusts are not natural persons, any property placed into trust may pass to heirs outside of Probate, which is why the trust is such an important method for avoiding Probate.
In addition to the living trust, a comprehensive estate plan will include a Durable Power of Attorney and Advance Health Care Directive to allow a trusted family member or friend handle financial and medical decisions in case of incapacity. A comprehensive estate plan will also include a will, to "catch" any property that was not placed into the trust, and to provide guardianship choices regarding minor children.