The Beauty of a Living Trust.

Living Trusts are named such because they can be amended, revoked and otherwise changed during the lifetime of the persons who created the Living Trust.

For most people, the goal is to avoid probate of their estate when they pass away. The best way to avoid probate is to make sure that all of your assets have beneficiaries listed. Payable on death beneficiaries for bank accounts. Primary and contingent beneficiaries for life insurance policies. And so on for many assets.

In California, you can't name a beneficiary for real estate holdings like your home. The way to do this is to set up a Living Trust and transfer title of your real estate holdings to the Living Trust.

The Living Trusts has beneficiaries designated within the trust instrument.

The beauty of a Living Trust is that you can name the Living Trust has a beneficiary for most of your other assets with the exception of retirement assets. You can name or transfer assets to your Living Trust "to be the beneficiary" for your real estate holdings, your bank account assets, your life insurance policies, your expensive vehicles, stocks and bonds and even some business interests like LLC ownerships or partnership interests.

So, let's say, you name the Living Trust to be the beneficiary for almost all of your assets (with the exception of retirement assets and have your estate planning attorney explain why). The Living Trust will be able to take control of all these assets where the Living Trust is named as a beneficiary and make handle your final distribution wishes.

Getting back to the beauty of Living Trusts... now, you've changed your mind about your beneficiary designations. Instead of contacting each financial institution to change the beneficiary listing, you can simply amend your Living Trust to reflect your new wishes.

How this works is really easy. To give an example, let's say your Living Trust divides your estate into 5 shares. One share for each of your three step-children, one share for your favorite niece and one share for your very helpful neighbor. Let's say you and your neighbor are on the outs because he parks his RV on your side of the street and this honks you off. Then what? You can amend your trust to either omit your neighbor or name a replacement beneficiary without having to change the beneficiary designations for all of your other assets. Why? Well, remember, that your beneficiary designations for all of your other assets points to your Living Trust.

The beauty of a Living Trust is you have one document that specifies how you want all of your assets to be distributed when you die.  And amending one document is easy when your wishes change.