Trusts Vs. Last Wills in California

by Joseph Scrofano

Probating a will can be a long and expensive process depending on the size and complexity of the estate. The cost of probate gets paid directly from the estate, and can deplete some of the estate’s resources and assets. Accordingly, many people choose to use a trust as a legal mechanism to transfer their assets upon death. California state laws regulate both trusts and wills, which have several key differences.

Terms

Different terms are used for wills and trusts. In the context of a will, the person who owns the estate and drafts a will is the “testator.” The person who drafts a trust is a “settlor.” In a will, the testator usually designates an “executor” to administer the estate upon the testator’s death. In a trust, the settlor designates herself as the “trustee” to maintain control over her assets while she is alive. The settlor also appoints a “successor trustee” who is responsible for transferring the estate’s assets according to the trust’s directives upon the incapacitation or death of the settlor. In either context, once the estate owner dies, she is called the “decedent.”

Probate

The major difference in a trust versus a will is that a trust does not have to go through probate. Probate can be time consuming and expensive. In addition, the court oversees the executor to ensure that he follows all California state laws. With a trust, probate is not required, which can save time and money. The successor trustee simply has to administer the trust pursuant to the trust’s instructions, all without court supervision.

Privacy

Another major difference between California trusts and wills is privacy. Upon filing for probate, a will becomes a public record in the state. That means all documents filed before the court can be accessed by the public. With a trust, the estate’s assets and how these assets are distributed do not become public, which is a major benefit for those who value privacy.

Small Estate

California is one of the many states that have a simplified probate process for small estates. Estates that meet certain statutory requirements -- including a value less than $100,000 -- can avoid probate even where the vehicle for transferring assets is a will, not a trust. This process includes beneficiaries submitting affidavits to the court, and only works if no conflict exists. If the beneficiaries have a conflict in the administration of the estate, it may go to regular probate.