Ask a Brazilian what a will is and they can answer. Ask what a trust is, and almost nobody knows. For attorney Patrick Benedek, who works in estate planning in California, explaining this concept to Brazilian families is "the first hurdle" — translating isn't enough; you have to explain the idea. In the episode of the "911: Emergency in Los Angeles" segment, he does just that with concrete examples, after telling the story of a Brazilian woman who died without any planning and left behind a house that had to spend years in court.

The will

A will is the same concept as in Brazil: "When I die, I want my house to go to my son. Period." It only takes effect after death. In California, a will is used to name heirs, appoint the person who will administer the estate (the executor) and name a guardian for minor children. What many people don't know: assets left by will generally still have to go through probate, the court-supervised estate process, with its costs and delays, when their value exceeds the limits set by law — and almost every house in California does.

The trust

A revocable living trust works differently. Patrick describes it like this:

• during your lifetime, you create a legal structure and transfer your assets to it — the house, accounts, investments;
• while you're alive, you yourself are the administrator (the trustee): you live in the house, rent it out, sell it, do whatever you want, just as before;
• in the document, you name who takes over the administration when you die — the successor trustee — and who gets each asset;
• when you die, the administration passes automatically to the successor, who follows the instructions: sell and divide, transfer, keep. "It's on paper, it's written right there."

What transfers at death, Patrick sums up, is the management, not the assets — the assets were already in the trust. That's why, in most cases, there's no judge and no probate, and what's saved in fees and time goes to the family. And unlike probate, which is public, a trust is private.

Two questions from Jason Lanzarini help make it clear. Does the heir have to "join the company"? No — a trust is not a company, nor an LLC; the beneficiaries don't have to do anything while you're alive. Can it be changed? Yes: "I don't want to give anything to this son anymore, only to this daughter; I sold this house, bought another" — a revocable trust can be amended at any time during your lifetime.

The detail that sinks many trusts: funding it

A trust only works for the assets that are inside it. If a person signs the document but doesn't transfer the deed of the house into the trust's name, the house can end up in probate anyway. That's why the package usually includes a pour-over will, which sends into the trust whatever was left out.

How much it costs

Patrick says it depends on the complexity: a simple house and a few accounts cost far less than an estate with several properties and businesses. You pay once, when it's drafted, and afterwards only for amendments. In another episode, police officer Edwin Wu says he set up his trust on a website for almost US$ 800, and regrets not having had guidance — the subject of another article.

What about the family holding company?

Jason asks whether there's anything similar in Brazil. Patrick says the trust has no exact equivalent; the closest, in spirit, is the family holding company (holding familiar), a company created to concentrate the family's assets and make succession easier. It's not the same. In the United States, companies serve mainly to separate liability: if someone gets hurt at your business and sues, the company protects your personal assets. Structures with an operating company, a separate asset-holding company and a holding company on top do exist, but that's another subject, with its own tax implications.

Beyond assets: the body and medical decisions

Patrick notes that the planning package usually includes documents stating what to do with your body — cremation or burial — and who decides for you if you're incapacitated, hospitalized, unable to speak: the advance health care directive. In the case of the hoarder, none of that existed, and he had to decide on cremation.

The attorney's rule

At the end of the episode, Patrick sums it up: if all you have is bank accounts, maybe you don't need a trust yet. "But if you have a house, do the people you love a favor and make a trust. It will make their lives much easier down the road." In California, he points out, any house in any city is already worth a lot — which is what makes probate expensive.

Sources and verification

• California Probate Code, sections 15200 et seq. — creation of trusts; sections 15400 et seq. — revocation and modification.
• California Probate Code, sections 6100 et seq. — wills, including the holographic (handwritten) will and the statutory will form.
• California Courts — Self-Help Guide: wills, trusts and probate.
• State Bar of California — consumer guides on revocable trusts.
• California Probate Code, section 4701 — statutory advance health care directive form.

Who's talking: Brasileiros em Los Angeles is the podcast of the Brazilian Community in the Los Angeles area, hosted by Jason Lanzarini, who since 2014 has organized the Community's Facebook groups in California. In this episode of the "911: Emergency in Los Angeles" segment, he welcomes Patrick Benedek, a California attorney practicing business law, estate planning and litigation, a volunteer with the legal assistance program of the Consulate General of Brazil in Los Angeles and vice president of the Brazil-California Chamber of Commerce; and Edwin Wu, a Los Angeles police officer since the 1990s with a long tenure at LAX airport, host of the Palavrão Tático podcast.

Note: the rules described apply to California. The law differs in other states. This text is general information, not legal advice: for a specific case, consult an attorney licensed in California.

Watch this part of the episode:

Trust vs. Will: How to protect your house from the Government (Probate) — starting at 30:50 · ☆ Brasileiros em Los Angeles