children listed as equal beneficiaries on your 401K, but one of your children predeceases you and leaves behind your grandchild. If you do not specifically add your grandchild as a beneficiary to the 401K, then your only surviving child will get 100% of the aforementioned 401K and your grandchild will receive nothing. If this asset were in a trust, then you can have it follow an entire bloodline of beneficiaries, so that your grandchild is not left out in the cold. As for residential property, under California law a ‘Transfer on Death’ (TOD) deed is an alternative to putting the property into a revocable trust. A TOD deed allows you to designate the specific beneficiaries that are to receive the property upon death of the original People generally want to avoid spending the money that it takes to create a trust, but it is a long-term investment that can potentially save your family time and thousands on attorney and court fees. FEATUREOF THEMONTH 15 owner if the deed is properly recorded within 60 days. Unfortunately, while a TOD deed is revocable, it has many limitations, especially for those doomsday scenarios one might avoid with a trust. If the deed is not recorded with the county by the statutory deadline or the named beneficiary dies before the original owner, then the TOD is legally ineffective and the property may pass according to who is determined by the probate court to be the rightful heir under California Probate Code Section 240. Also, if the property owner becomes incapacitated through dementia, stroke, coma or another medical event, there may be no way to revoke the deed even due to changes in the circumstances or a need to qualify the owner for governmental assistance. TOD deeds are also not good solutions for individuals who have minor children because while minors may own real property, they may not convey or make contracts relating to real property under California Family Code Section 6701 and California Civil Code Section 1556. By creating a trust and putting the property into it, instead of making a TOD deed, none of this need be a concern. Therefore, in order to avoid any doomsday situations that result in your assets going through probate, it is wise to plan for every scenario and place anything that is a large money asset into a revocable trust. This is especially true for the average homeowner in California, even if just starting out. By placing your money accounts (any savings accounts, larger checking accounts, IRAs, 401Ks, life insurance policies, annuities, etc.), business interest, and houses or real estate into a revocable trust, you are able to create a one-stop-shop for any changes you may want to make regarding the beneficiary of any given asset. You are also able to maintain complete control over your assets throughout your lifetime, while creating an easy-tomanage treasure map for who you leave in charge of making distributions from your estate. As the creator of the trust, one of the most important decisions that you
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