Living trust provides alternative to probate
By Roger L. Lund Special to the Acorn

With a living trust, you can completely avoid the need for a conservatorship if you become incapacitated, a guardianship if minor children are involved and probate when you die.

Defining a living trust

A living trust is a legal document that allows you to transfer ownership of your titled property- i.e., your home, other real estate, cars, stocks, bonds, bank accounts, etc.- and your other property, such as clothes, furniture and jewelry, from your individual name to something called a "trust," that you control.

Think of it as forming your own company, with you and your spouse as the sole employees. You personally don't own your property any more because everything is owned by your new company, your trust. However, as the employees, you and your spouse have complete control over the trust. If you can't manage your company, your successor can step in to manage it for you.

Defining probate and

how to avoid it

Probate is the act of officially proving the authenticity of a will. Because it usually requires the involvement of a court and lawyers, the process can become unnecessarily expensive and timeconsuming. There are two ways to avoid probate. To avoid probate, you must either own nothing in your own name or have a living trust. The living trust allows you to own nothing in your name yet still have complete control over everything in your trust's name. Nothing changes except the names on the titles. You still control everything as you did before. Since you own nothing in your own name- everything is in the name of your trust- there is nothing to probate when you die or become incapacitated.

What happens if you

become incapacitated?

If you become incapacitated during your lifetime, your backup trustee, or co-trustee, automatically steps in and handles your financial affairs for you. Remember, all of your assets are in the name of your trust. All that your backup trustee needs to do is have a copy of the trust designating him or her as backup trustee and a statement from a doctor declaring that you can no longer manage your trust. Your successor trustee can then write checks, make deposits, pay bills, sell property and anything else necessary to manage the trust for your benefit.

No courtsupervised conservatorship is required, and everything is done privately. You and your family are spared the entire frustrating, time-consuming and expensive process of having to set up a conservatorship and get the probate court's approval to spend your own money. If you recover, you simply start handling your affairs again as trustee and your backup trustee returns to being your backup. There is no complicated paperwork or procedure to regain control.

What happens when you die?

When you die, your backup trustee acts like an executor would, if you had only a will, but does not report to the court. The backup trustee pays your final bills (signing the checks as successor trustee), pays any taxes due and then distributes the trust assets as you have instructed. Since all of your property is titled in the name of your trust, it is very easy for your backup trustee to manage the trust. Remember, the only documents your backup trustee needs are a copy of the trust and your death certificate. The process is much quicker and less costly than probate.

Furthermore, your assets are not frozen and nothing is advertised or made public record. No one will ever know how you distributed your estate, other than the beneficiaries themselves. None of your nosy neighbors can go to the courthouse and read your trust or examine your property holdings. Finally, no heirs can emerge from the woodwork and make claims against your estate.

A properly drafted living trust can be a powerful tool to manage your affairs both during your lifetime and at your death.

Roger L. Lund is a principal at the the Law Offices of Gose, Lechman & Lund, a Camarillo law firm with a practice in estate and tax planning, probate and trust administration; and incorporation and limited liability company formation. Lund also serves as a temporary judge in the probate department of the Ventura Superior Court.