The probate process in California is slow during the best of times, but it has come to a halt during COVID-19. Pandemic-related court closures are adding months to the probate process, preventing families from receiving inheritances in their moment of greatest need – family members often need the funds to pay for funeral services and medical bills and need immediate access to other assets to run family businesses and more. COVID-19 is also affecting the value of real estate and other long-term assets, leaving many beneficiaries scrambling to figure out which assets to keep and which to sell.
Many Californians are switching to revocable living trusts during the COVID-19 pandemic. Otherwise known simply as “living trusts,” these legal arrangements alleviate much of the stress and anxiety associated with asset management in case of death or incapacitation from coronavirus or another cause.
A living trust is a document that gives a family member or another person, known as a trustee, control over your property and assets. Made while you are alive, these trusts help ensure that your assents and property are managed according to your wishes upon your death or if you should become incapacitated. Trusts are not subject to probate, which means all the items in your trust will transfer to the beneficiaries immediately after your death or incapacitation, without the lengthy probate process that could take several months or longer. This structure also allows you unfettered access and control over the assets transferred into the trust during your lifetime.
There are two main types of trusts – revocable and irrevocable. In a revocable living trust, the terms can be modified at any time. This structure gives you, the Grantor, unfettered access, and control over the assets transferred into the trust during your lifetime. You can remove beneficiaries and designate new ones, for example, and change how you want your assets to be managed. Irrevocable trusts, on the other hand, are set in stone the moment you sign off on them. This could present a serious problem during the ever-shifting landscape of the COVID-19 pandemic.
Revocable trusts provide several benefits during COVID-19, including:
Creating a revocable living trust during COVID19 in California can help you manage your assets in uncertain times. It can also provide your family with the security they need when they need it the most.