Legal Question in Wills and Trusts in California

Re: Is a living trust necessary if all titled assets are in joint tenancy?

Your planning will probably avoid probate. However there are two other issues. First, assets held in joint tenancy will not receive a "step-up in basis." This means that your wife may have to pay some income taxes on assets she inherits from you, if she sells them for more than what you paid for them. However this will only apply to your home if the profit is more than $250,000, under current tax law. The second issue is more basic, what happens after your wife dies? If you have any children, they will have to go through a probate, unless your wife has a trust. She could put assets in joint tenancy with your children, however I would strongly urge that not be done, because she would lose control over the asset.

Re: Is a living trust necessary if all titled assets are in joint tenancy?

This would avoid probate, at least until the last surviving joint tenant dies.

However, the survivor may not receive a complete step-up in basis for capital gains tax purposes, unless you also have a written community property agreement.

Re: Is a living trust necessary if all titled assets are in joint tenancy?

The title of assets in joint tenancy will eliminate the need for a probate. It might not get the best tax result if that is a factor.