Kolodji Family Law, PC provides non-litigation estate planning services for persons looking to create a living trust to help protect their assets including real estate and personal assets from the probate process.
Very commonly, a living trust is established during a person's lifetime to place all or a portion of that person's assets into a trust to distribute such assets to chosen loved ones or a religious or charitable organization important to that person's legacy as part of their estate plan. Often this is used for real estate or financial accounts. The grantor of the trust may select someone to act as their trustee, or make themselves the trustee during their lifetime and appoint a successor trustee for their estate planning purposes.
One of the important considerations, if you have children under 18 years old, is including provisions in the living trust that provide guardianship provisions and protections for your minor children.
A living trust is a vital to avoiding the probate process altogether which that person, and their family's privacy, saving their loved ones the costs associated with the probate process, speeds up the process for their loved ones, and overall is a more efficient way to manage the settlor's assets after their passing, or during their lifetime during a period of incapacity. Most times a living trust will keep your loved ones out of the "probate trap".
A living trust grants the person creating the trust more control and flexibility on how their assets will be handled in the event of their incapacity or at the time of their passing. It also maintains privacy for that person and their family. No person should want their loved ones to face the daunting probate process, due to a failure to create a living trust.
Thanks the Decedents’ Estates Law passed in late 2024 (AB 2016), starting April 1, 2025 the threshold to avoid probate will increase to $750,000 for real property (for the primary residence) and $184,500 for all other personal property. (The $750,000 threshold will be periodically adjusted for inflation every three years based on the Consumer Price Index for All Urban Consumers). While this will streamline the process for a few people who will still have to seek Probate Court approval in an expedited process, this updated threshold is less than the median house price for Los Angeles County.
This means that for the majority of those living in Los Angeles County, they will still need an estate plan in place to avoid the probate process. A living trust is an important part of such an estate plan. Even after April 1, 2025, if your primary residence is worth more than $750,000 (e.g., roughly what you would get for your home if it was sold), and if it does not have a joint tenancy title designation (generally only appropriate for married spouses), upon the passing of the person named on the deed, the probate process cannot be avoided unless that person had created a living trust prior to passing.
Unfortunately, while AB 2016 does provide some relief for some of the homeowners of Los Angeles County, our legislature still has not eliminated the "probate trap" for the majority of homeowners in Los Angeles County. Even if you personally think your property is worth less than $750,000, your family will still be required to obtain court approval that your home was worth less than $750,000 at the time of your death to avoid probate. So if your home is close to the $750,000 valuation, it may still be prudent to create a living trust.
A well established way to protect your family from the "probate trap" is establish a living trust. You are setting aside some time now to save your loved ones a greater amount of time later. The cost now to create a living trust now is significantly less than what the "probate trap" will cost your family in the future.