Most lawyers will tell you that if you own real estate in California, you probably need a Trust. That does not mean that you only need a Trust if you own real estate. If you rent, live with your parents, live rent-free at your significant other or spouse’s place, or couch-surf, you might need a Trust.
Probate starts on estates over $184,500. Most real estate in California is worth more than $184,500. There is no limit on the value of assets you can put into a Trust, and anything properly put into a Trust will not have to go through probate. So, if you own real estate in California, such as a single-family home or condominium, and want to avoid probate, you probably need a Trust. This is where the standard advice comes from.
This does not mean that Trusts are only for homeowners.
Here are some reasons that you may need a Trust even if you do not own real estate:
- You want to avoid probate and you have more than $184,500 in assets in your own name and those assets do not have a beneficiary designation on them.
- To protect you during your lifetime in case you lose the capacity to manage your own money.
- You have minor children.
- You and your spouse have children from prior relationships.
- You are married and have separate property.
- You want to keep your financial affairs private.
- You have a Beneficiary with special needs.
- You have a Beneficiary with an addiction.
- You have a Beneficiary who cannot manage their own money.
- You want someone else to manage your affairs for you when you get older.
- You do not want to give one lump sum to your Beneficiary (prolong the distribution time).
This list is not an exhaustive list; it includes the most common reasons people want Trusts. You may have your own reasons for wanting a Trust that have nothing to do with owning real estate.
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