In California, assets owned by a Trust avoid Probate. So, if you own more than $166,250 of assets (excluding assets held by a Trust, assets held in accounts / policies that have beneficiaries designated, assets held jointly with someone else and mobile homes and automobiles), you need a Trust if you wish your estate to avoid Probate on your death. For example, if you own a home in California (which due to CA market values is likely worth more than $166,250), you should have a Trust to avoid Probate. Without one, a Probate will be required on your death, the time and expense of which will be charged to your beneficiaries.

What are the reasons to create a Trust?

Avoiding a Probate on your death (as discussed above) is just one reason to create a Trust.  There are at least two (2) other common and important reasons why one may need / want a Trust.  First, if it is important for you to control how and when your beneficiaries (for example, children) inherit your assets on your death.  Common Trust provisions include restrictions on the age at which beneficiaries inherit their share of Trust assets and how those assets can be used until they reach that specified age.  For example, by creating a Trust, you can ensure that until your children reach age 25 (or any other age you may choose), they cannot have direct access to their inheritance; rather, they can only access their inheritance for their health, education and support, as determined by the person you name as their “Trustee”, like a responsible and trustworthy family member or friend.

A second important reason to create a Trust, though less common than the two (2) provided above, is to implement a plan to save on and/or defer estate taxes that may, depending on the size of your estate, be due on your death.   Under current federal estate tax laws, estate taxes are not an issue for the vast majority of us (i.e. persons who have less than $12,060,000) in assets.  But for those who have more than this amount, Trusts provide a way to plan in advance for expected estate taxes.  See Tax Planning page