1. For most clients, a living trust (if created and maintained properly)  will avoid probate for all of the assets that have been transferred to the trust. Probate is a costly, time-consuming process that has few, if any, advantages and many disadvantages in California.  However, there are some cases in which having a living trust will not provide protection against probate because the estate has few probate assets. The "floor" in the State of California for probate is $100,000 in "gross assets". So almost anyone who owns a home is subject to probate unless they properly setup a Living Trust.
2. A trust also can avoid a conservatorship, which can be expensive, time-consuming and restrictive. Conservatorships are needed when an individual can no longer manage his or her financial affairs. A conservator is appointed by a court and given the power to manage the conservatee's financial affairs, and also make decisions concerning the conservatee's living arrangements. By establishing a Durable Power of Attorney for Health and a DPA for Financial Decisions through a Living Trust, a conservatorship will not be needed.  
3. For married couples with more than $2,000,000 in net worth, a living trust can help reduce or eliminate federal estate taxes by setting up an A/B (Marital) Trust or an A/C (Charitable Remainder Trust).

Steps in Setting Up a Living Trust:

1. A trust document is prepared that usually names the creators (the spouses who are setting up the trust) as the trustees of the trust. The trustees are responsible for managing the trust and its assets. The trust usually nominates other persons, banks, or trust companies as successor trustees. The successor trustee(s) will take over management of the trust after the death, resignation, or incompetency of the original trustee(s).
2. The trust also provides for distribution of the assets of the trust after the deaths of both trustors. These provisions can be the same as those found in a will and might include trusts for younger beneficiaries, gifts to charities, etc.
3. Depending on the size of the estate, the trust might also include provisions that will reduce or eliminate federal estate taxes. Such as a "Marital Trust" or a "Charitable Remainder Trust".
4. After the trust is signed, the trustors transfer their assets to the trust. A Living Trust package will include documents to facilitate this process. A "pour over" Will should be completed to ensure that assets not previously placed in the trust are automatically transferred into the trust upon death of the trustors.

Advantages of living trusts:
1. Assets held by the trust will not be probated. Legal fees for probating an estate are usually much higher than the fees for administering a trust. Probates can also take a year or longer to complete, but a trust administration usually can be completed in a much shorter time.
2. If a trustor becomes mentally incompetent, the successor trustee can take control of the trust and avoid the cost of a conservatorship in most cases. Conservatorships are often used in situations in which someone can no longer manage his or her own financial affairs or personal care. A conservatorship is a court-supervised proceeding that can involve substantial legal fees.
3. Federal estate taxes can be reduced or avoided.
4. The trust is revocable during the lifetimes of the trustors and changes can be made to the Living Trust as often as necessary.

Disadvantages of living trusts:

1. A living trust costs more than a will.
2. Transferring assets to the trust involves costs and paperwork not required for less elaborate estate plans.
3. Administration of a"Marital" or "Charitable Remainder" Trust can involve additional effort for the surviving spouse.
4. Refinancing real property that is owned through a trust may require removing the property from the trust before the refinancing, and then putting it back into the trust. A few lenders do not require that property be taken out of the trust when it is refinanced.

Conclusion:

My recommendation is to have the Living Trust package prepared by an attorney who specializes in Estate Planning under California Law. If you relocate out of California, you need to have a lawyer revise or prepare a new Living Trust to coincide with that state's laws.

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