The answer depends on the assets you own. If you own real property or personal property assets such as stocks or cash assets in excess of $100,000, in order to transfer title to your successors, the court would have to issue an order directing the transfer if you do not have a trust. This is a very time consuming and expensive process known as probate. It is public, with publications and court hearings. Anybody who wants to can look at all your assets as a list (inventory) will be filed with the Superior Court Clerk. All of this is avoided by creating a trust and putting your property into it.
What Is the Difference between a Will and a Trust?
A Will, in order for assets covered by it to be transferred, must be probated- go through the court process referred to above. A Revocable Trust is entirely private and transfer of assets can be done as soon after death as the surviving trustee gathers the information.
But I just Want Everything to go to My Spouse- Do I still need a Trust?
In California, if you held your property as community property, it will pass to the surviving spouse without the need of a full probate. There are two problems with relying on this law. First if you both die, where do things go? They go to probate and to whomever your heirs happen to be according to state law. Second, if you have children by a former marriage, they may be entirely cut out from any inheritance- and your surviving spouse can give your share to the next wife or husband who comes along.
What is in a Trust
A Revocable Trust has 2 major sections. The first names your successor trustee (you-and your spouse) are the first trustees and you need to name someone when both of you are gone. That section also tells your successor what to do with your property. The next major section deals with the powers of your successor to act just as you could if you were alive. These are much longer nowadays then they used to be since transfer agents (bank, stock brokers, title companies) demand very specific powers.
What Does a Trust Do and Not Do
What it does is avoid probate and insure that your wishes are taken care of after your death(s). It prevents the wrong people from getting your property, insures that your children by as many marriages as you may have had are taken care of and can exclude people specifically whom you do not want to be in control. It does NOT protect assets- that requires an Asset Protection Trust- a very complicated and very expensive product that may or may not work. It does NOT have any major tax planning unless you have a very large estate that would be subject to estate taxes, in which case it can save $1.5 million in taxes.
Where Can I get a Trust and How Much Does it Cost?
There are non-stop advertisements for cheap revocable trusts in California for as low as $500. These factories are a blessing to attorneys since people who use them usually end up with a defective trust- which means high probate fees or even litigation. It is important that you consult with a qualified estate planning lawyer in your area. Fees will vary, but the savings your heirs will realize far outweigh this small investment in their (and your) peace of mind