Estate planning in California is not something just for the wealthiest residents of the state. All adults need to consider an estate plan due to a number of very practical reasons. For one thing, when there are minor children, a couple can hardly fail to take some basic estate planning steps to assure a secure future for the children should both parents die unexpectedly while the children are minors.
Setting up living trusts and/or testimonial trusts is a helpful way to resolve that problem. In a living trust, the benefactor puts assets into the trust while still alive. This can be done by a couple with young children. The vehicle most used under these circumstances would be a revocable living trust, which means that the maker of the trust can retract and dissolve it at any time if desired. In cooperation and under the guidance of an estate planning attorney, most or all assets will be selected and included in the trust corpus.
Provisions of the living trust will provide for the children and establish instructions for disposing of the trust corpus upon the death of the parents. This type of procedure will pass the assets without going through probate court and without relying on the administration of the couple's reciprocal wills. There may be wills that are executed, but they will play a minor role in the foregoing scenario where the living trust is the prime mechanism in play.
The couple can decide to instead rely primarily on their reciprocal wills in which they leave everything to the other, and in the event that they are both deceased, everything to the children in equal shares. The funds would go into a testamentary trust for the welfare, care and education of the children. The proceeds do not have to be distributed to each child upon turning 18. Instead, a series of distributions can be made, such as in three or five-year intervals. The choices available under California law and the estate planning complexities are such that it is best to establish the precise plan after thorough review of the couple's finances and desires with their estate planning attorney.
Source: mvtimes.com, "Estate planning: It's not just for the wealthy.", John Kageleiry, Dec. 5, 2017