How Much Does a Living Trust Cost in California?

A living trust, a legal tool often used when estate planning, allows individuals to transfer their assets into a trust during their lifetime. Many people choose to set up a living trust to avoid probate when deceased, manage assets efficiently, and maintain privacy. You may be wondering, “How much does a living trust cost in California?” Many are also unfamiliar with the process of setting a trust up, and the benefits of having one.

Living Trust: The Basics

The term living trust is also referred to as an inter vivos trust in some areas. It is the legal arrangement when a person who is still alive transfers their assets into a living trust. The trust is then managed by a trustee. The trustee can either be someone that the grantor designated or simply the grantor themselves. When the person dies, the estate doesn’t have to go through the court-supervised probate process. Instead, the assets are distributed much quicker and inexpensively.

Due to the state of California’s high property values and the complexity of the state’s probate process, choosing to have a living trust is a good idea. Having a living trust will ensure that your estate is distributed efficiently and to the correct beneficiaries, according to your wishes. You will also save money by having a living trust, as the probate process in California is often expensive and lengthy.

Costs Involved in Creating a Living Trust

The complexity of the estate, the assets involved, and whether or not you hire professional legal assistance will all affect the cost of creating a living trust. All these costs can vary significantly; however, in general, the bigger and more complex the estate, the higher the cost will be to create the living trust. Upon setting up your living trusts, the following are the main types of costs that factor into the total price:

• Attorney Fees. The most significant cost comes from hiring an attorney to draft the living trust. Lawyers who focus on estate planning are known to be trusted professionals when it comes to creating living trusts tailored to the specific needs of their clients. It’s beneficial to hire a well-experienced estate attorney because they are able to ensure the trust meets all legal requirements and is correctly structured.

These lawyers will help decide what kind of living trust suits your unique situation: a basic living trust or comprehensive living trust. A basic living trust is simple and suitable for those with minimal assets. The attorney’s cost will cover legal advice and drafting the trust document.

A comprehensive living trust is for those who have a more complex estate. These trusts include the transfer of real estate, other substantial assets, and business transfers. These often include other estate planning documents such as wills, advance healthcare directives, and power of attorneys.

• Trust Funding Fees. Trust funding fees refer to assets being transferred into the trust once it has been created. If you work with an attorney to properly title and transfer your assets, this process may involve costs. It’s important to seek guidance when valuing and transferring your assets to ensure your real estate, bank accounts, and investments are all appropriately accounted for.
• Ongoing Trustee Fees. You may choose to serve as your own trustee, or you may designate someone else, such as a family member, business associate, or bank, to act as trustee. If you choose this route, there will be ongoing trustee fees.
• Court and Filing Fees. There are not significant court fees with living trusts, which is vastly different from the probate process which involves many court filing fees. If for some reason the trust needs to go to court, there can be court fees associated with that. Typically, this happens if there is an issue with the trust’s validity.

FAQs

Q: What Are the Factors Affecting the Cost of a Living Trust in California?

A: There are many factors that can affect the cost of a living trust in California. The size and complexity of the estate, type of professional, amount of professional involvement, and location all play a role in total price for the living trust.

Q: What Are the Advantages of Having a Living Trust in California?

A: Even though they can be costly, there are many advantages to having a living trust in California. These include avoiding probate (which can end up costing more and being a lengthier process), privacy, continuing asset management, and flexibility. A living trust is not a public document, and you are able to make amendments during your lifetime in the event your wishes or situation change.

Q: What Are the Disadvantages of a Living Trust in California?

A: Although living trusts can be useful for many, there are some disadvantages of having a living trust in California. The potential disadvantages one should consider when creating a living trust are initial cost and complexity, ongoing maintenance, funding the trust, no protection from creditors, limited protection from incapacity, property taxes, no federal income tax, potential for family disputes, and limited scope for certain assets.

All these should be discussed with an estate planning attorney, as these are unique in every situation.

Q: Do You Need an Attorney for a Living Trust in California?

A: While you are not required to have an attorney for a living trust in California, it is often a good idea to consult with one when drafting your document, especially if your estate is complex, you want to minimize legal challenges, you have specific legal questions, and you need help with tax considerations.

Q: How Long Does It Take to Process a Living Trust in California?

A: The time to process a living trust in California is dependent on several key factors and whether or not any administrative issues need to be addressed. The key factors that affect the processing time include trust complexity, asset types, trustee’s efficiency, and legal or tax issues.

Reach Out to a Trusted Professional for Help with Living Trusts

When creating a living trust, it is vital to know all the information and steps to take to ensure you are protecting your assets. At Goebel Estate Planning, PC, I can help you draft your living trust and make decisions that help protect your estate. Contact Hillary Goebel today to get started creating your living trust.