In the State of California, the law states that if you own property, your property will need to go through probate court at the time of your passing. However, establishing a family trust can be very beneficial for your loved ones, as it allows the ability to transfer assets without the need to enter probate.

*This article was updated 12/7/21.

As Yahoo Finance explains in “What Is a Family Trust and How Do You Set One Up?”, a family trust is a trust you create to directly benefit your family members financially. When done correctly, a family trust will facilitate the transfer of assets to heirs and/or beneficiaries without the time and stress of probate court.

General Terms You Should Be Aware Of

As a legal arrangement, a California family trust will allow a person to transfer the management of assets or property to a third party, who then manages these for the benefit of others. The three parties involved in a trust arrangement are the grantor, the trustee and the beneficiaries:

• The Grantor is the person who creates the trust and transfers his/her/their assets into it. The grantor(s) also has the authority to name the trustee and potential beneficiaries.
• The Trustee is a party who has been designated to manage the assets in the trust for the beneficiaries. A trustee can be a single individual, as well as two or more joint trustees. A trustee can also be a business entity, such as a trust management organization or a bank. It should also be noted that beneficiaries can also be designated trustees. A grantor can serve as a trustee when creating a revocable living trust.
• The Beneficiaries get some type of financial benefit from the trust. Typically, this will involve a partner or spouse, children, grandchildren, or other relatives. Additional beneficiaries can involve charitable organizations. It should also be noted that the grantor can also be a beneficiary.

For the purposes of a family trust, it’s just your family members who are beneficiaries.

Types of Trusts

Trusts are usually classified based on the degree of control the grantor will have over the property or assets in the trust. Family trusts are a type of living trust, which means it will be created during your lifetime. The two types of living trusts are:

• Revocable Trusts – which provide the grantor the opportunity to revoke, amend or cancel the trust. In the event that the trust is revoked, all assets and property in the trust will be returned to the grantor. Revocable trusts can be changed or terminated at any time, while the grantor is alive.
• Irrevocable Trusts – which are permanent legal documents. These trusts preclude grantors from being able to obtain their assets in return, without first obtaining the permission from the trustee and/or beneficiaries.
• Special Needs Trust – Establishing a special needs trust ensures a person will still qualify for certain government benefits they require during their lifetime while also receiving funds in a discretionary account for their benefit.

As a subcategory of a living trust, with a revocable family trust, you can be your own trustee as well as name successor trustees to take control, in the event you become incapacitated or pass away. If it’s an irrevocable trust, you must designate another person to act as the trustee.

Key Differences Between a Revocable Living Trust and an Irrevocable Living Trust

With a revocable family trust, you will be able to accomplish the following:

• Maintain privacy. As beneficiaries are able to avoid probate court, there is no need to make public the assets and debts you have accrued at the time of your death. There will also be no public record of where your assets went.
• Avoid probate. A valuable benefit of a family trust is that beneficiaries will be able to avoid the time and expenses associated with probate court.
• Protection of assets. A family trust can preserve assets for individuals who are not able to manage the assets themselves. This can include beneficiaries that are disabled, underage, or are financially irresponsible.

An irrevocable family trust will be able to offer the aforementioned benefits, with the inclusion of the following:

• Circumvent estate taxes. With an irrevocable trust, the grantor will no longer have the title of his or her property. Once the grantor has passed away, the property will not be included in the estate for state and federal estate tax purposes. In many cases, this will be applicable to those with a significant amount of assets and wealth.
• Protect assets from creditors. When the title to a property has been placed under the name of a trustee, the property will no longer be subject to creditor claims of both grantor and beneficiaries.
• Aiding in the qualification for Medicaid. If the grantor needs nursing care, he or she may be able to enable qualification for these benefits.

Creating a Family Trust in California

Setting up a family trust is essential a two-step process:

1. Creating and developing a trust agreement; and
2. Transferring the property and assets into the trust

Speak to a Well-Versed Attorney

To summarize, a family trust will allow certain property to be managed by a third party in accordance to your instructions for your beneficiaries. Family trusts allow you to add conditions, such as a child can’t use the money, until they complete college or reach a certain age. Moreover, family trusts are beneficial to those who have a child who requires specialized medical care.

A family trust is a useful tool when it comes to estate planning, especially if you want to avoid probate. When transferring the title of assets to a family trust, this will mean that they will no longer be subject to probate. Finally, you can also use an irrevocable family trust to protect assets from creditors, in the event that you’re sued.

If you are considering creating a family trust, speak with an experienced estate planning attorney at the Law Offices of Robert H. Brumfield, P.C. to make certain that this type of trust is right for you, as there are several types of trust options you can use in estate planning. Some of these trusts have extremely specific purposes, while others are more general. An estate planning attorney can help you compare different trust options to help you determine if a family trust is right for your estate plan. Consider contacting the Law Offices of Robert H. Brumfield, P.C. today for more information.

When a person dies, the decedent’s property must be distributed. The property goes either to the persons named in the decedent’s will or in accordance with the default laws of the state where the decedent lived if they left no will. Nevada, like all states, has specific statutory requirements for probate. The probate process must comply with these requirements to transfer property according to Nevada state law. The experienced probate attorneys at Lee, Kiefer & Park, LLC, can help you navigate the process.

The attorneys at Lee, Kiefer & Park, LLC, have a wealth of probate experience. Managing partner Kennedy Lee has practiced trust and estates law in Nevada since completing law school in 2011. Mr. Kiefer and Mr. Park focus his practice on litigate matters related to trust and estate administration. Mr. Lee and partner Matthew Park carry the highest possible rating from the prestigious Martindale-Hubbell peer-based lawyer rating service. The three partners’ experience is complimented by that of Suzanne Fitts, a 1989 law school graduate who serves the firm as of counsel.

Overview of the Probate Process in Nevada

The probate process, from a bird’s eye view, consists of locating the decedent’s will if the decedent had one, gathering together the decedent’s assets, paying the decedent’s debts and taxes, and then distributing the remainder of the property to the decedent’s beneficiaries or heirs. This happens with varying degrees of involvement by the probate court. In general, as the value of the estate increases, the probate process becomes more involved. Therefore, the first step in probate to determine the value of the estate.

Small Estates

If the decedent owned no interest in any real property, and the estate is valued at $25,000 or less, then the decedent’s estate can avoid probate by using a small estate affidavit. If the person entitled to inherit the decedent’s estate is a surviving spouse, then the small estate affidavit can be used for an estate valued up to $100,000. The affidavit lists the decedent’s property, states that debts and taxes have been paid, and says that the person filing the affidavit is entitled to the rest of the estate. No further probate process is necessary.

Set Aside Estates

If the value of the estate does not exceed $100,000, the estate may be set aside without administration based on only one pleading with the court. This means there is minimal involvement with the probate court. The person seeking a set aside files a petition with the probate court requesting authorization to set aside the assets of the estate to those entitled to inherit them. After a court hearing, if the statutory requirements have been met, the court signs an order allowing the set aside. There is no further probate process. The court order can then be used to transfer ownership or title to the assets.

Summary Administration

This probate process is available for estates valued at no more than $300,000. The procedure allows for a truncated probate process. For the court to allow summary administration, the court must find that summary administration is advisable “considering the nature, character and obligations of the estate.” Upon that finding, some of the procedures required for full probate are revised and are less stringent.

General Administration of Estates

If the value of the estate exceeds $300,000, then the estate is subject to general administration. The general probate process requires many steps for the personal representative. The court must approve most of the actions that the personal representative takes in administering the estate.

The Probate Process for General Administration

Depending upon the value of the estate, a general administration might not be required. If it is, these are the general steps in the probate process:

• The nominated personal representative must locate the original will, if the decedent left one.
• That person must file a petition for probate in the county where the deceased lived, within thirty days of death.
• The petition for probate will request that the person be appointed personal representative, as stated in the decedent’s will. If the decedent left no will, then the petition requests appointment of a close family member as the personal representative.
• The personal representative provides the statutory notices of all court hearings and publishes a notice to creditors in a newspaper where the decedent lived. Creditors have three months to present their claims.
• The personal representative marshals the assets, and prepares an inventory of the assets and debts of the estate and file it with the court.
• Certain actions may require court direction on how to proceed. Other actions require court authority.
• Eventually, the personal representative files a petition seeking authority to pay the outstanding debts of the decedent/estate and to distribute the remainder to the beneficiaries.
• Once all the assets have been distributed, the estate is closed.

Each of these steps must be completed properly and accurately. If you or someone you know needs an experienced probate attorney in Las Vegas, or anywhere throughout the state of Nevada, please contact Lee, Kiefer & Park, LLC, for a free consultation, either by using the online form or calling 702-333-1711.