Living Trust Benefits for Californians
A Living Trust is also known as a Revocable Inter Vivos Trust
A revocable inter vivos (“living”) trust will generally be suitable if the settlor wishes: To avoid probate administration of his or her assets after death allowing the assets to be distributed without probate; and to set in place means whereby his or her property can be managed by a trustee in the case of disability. Revocable inter vivos trusts typically function on two levels: first, as a will substitute; and second, as an alternative to a conservatorship. Probate fees to the court and to the probate lawyers are set by statute, and probate is expensive. Assemblyman Mike Gatto, D-Glendale, who authored AB139, the state bill which creates the Revocable Transfer On Death Deed, stated that the average cost of probating an estate is $26,000.00.
A revocable inter vivos trust will not save any federal income, estate or gift tax during the settlor’s lifetime. However, a revocable inter vivos trust may be used to achieve some tax-savings goals after the settlor’s death. For example, a revocable inter vivos trust (or part of such a trust) may be designed to qualify for the charitable deduction or the marital deduction. A revocable inter vivos trust may also be used to create a bypass (or credit shelter) trust that will avoid estate taxation in the estate of the surviving spouse.