California Trusts Lawyer
A trust-based estate plan offers a lot of advantages to the owner of the estate, as well as the people who stand to inherit. As The Probate Guy, I work with probates, wills and trusts throughout Southern California. I can help you understand which types of trusts are right for you, including revocable living trusts, special needs trusts and charitable trusts. If you think a trust is being mismanaged or was set up improperly, I can counsel you on your options to challenge the trust or trustee through litigation. Call me if you are not sure what to do with a trust or how it affects your probate. I am always here to answer your questions and guide you through your probate or estate administration. Call NOW for your FREE consultation.
What Is a Revocable Living Trust?
If you include a trust in your estate plan, in most cases, it will be a “revocable living trust.” It’s revocable because you can change it or revoke it any time during your lifetime. It’s living because you create it while you are alive (a trust can be created after death by including one in your will; that’s called a testamentary trust). Now that we’ve covered what “revocable” and “living” mean, what exactly is a trust, anyway?
When you create a trust, you take assets (money, stocks, real property, etc.) and transfer them to the trust. The trust now has “legal title” to the property in the trust. You name a trustee to manage and invest those assets for the benefit of the beneficiaries, who are the people you name to receive the trust property after you are gone. The beneficiaries have “equitable title” to the property, meaning they have an ownership interest in the assets that has not yet been realized. After you die, the trustee transfers the assets to the beneficiaries, and they now have full legal title to the trust property.
When you create a trust, you can name yourself to be the trustee (or you and your spouse can be co-trustees). That way, you get to maintain control over whatever property you put in the trust and can manage it however you want. In this case, you’ll name a successor trustee who will take over after you (or you and your spouse) die and who will distribute the trust property to the beneficiaries.
Why Use a Trust Instead of a Will?
Trusts avoid probate. Since you transfer title in the property to the trust, it is no longer part of your estate and doesn’t need to be probated. The process of administering the trust and transferring the property to the beneficiaries can go much more quickly than it would if it had to go through probate. Trusts save time, money and headaches by avoiding probate.
Also, trusts are private documents. Once your will is entered into probate, it becomes a public record that can be looked up by anyone who wants to see how much you were worth and where all your money went. If you want to keep details like that confidential, put your property in a trust.
By transferring property into a trust now, you also protect it now and keep it safe from attack by creditors or getting lost in a divorce. Finally, you can use different types of trusts to accomplish different purposes. For instance, there can be tax benefits to transferring property into a trust, including avoiding the generation-skipping transfer tax. You can provide funds to a child or grandchild with special needs without jeopardizing their eligibility to receive government assistance from Social Security or Medi-Cal. You can also make gifts to charities and still leave an inheritance to your family. If you want to make sure a beneficiary finishes college or doesn’t waste the money on silly things or bad habits, you can attach strings to the money in a trust. Whatever you are thinking about for the inheritance you leave behind, there is probably a trust that can help you do it.
How Do I Make a Trust?
Trusts have to be in writing. You need to create a written trust document, naming one or more trustees and one or more beneficiaries. Then, you need to fund the trust. You don’t have to put all your property into the trust at once. If you want, you can just put a few dollars in to create the trust and have the rest funded later through your will. A trust also has to be formed for a lawful purpose that doesn’t go against California public policy.
Can a Trust Be Challenged?
Trusts can be challenged and wind up in court, just like wills can be contested in probate. As an intended beneficiary, you could claim that the trustor created the trust under somebody else’s undue influence or fraud. You could claim the trustor lacked the mental capacity to create a trust or that it wasn’t formed correctly under California law. Trust litigation might also include challenges to the trustee’s performance or claims the trustee breached fiduciary duties owed to the trust.
If a trust is invalid, the property can be sent back to the estate and distributed in probate according to the will or the California laws of intestate succession. Courts can also impose a “constructive trust” on property and create a trust even where one did not exist in the first place. Trusts and trust litigation can be complicated, which is why you need a knowledgeable and experienced attorney on your side to advise you and represent you.
Call The Probate Guy For Help with California Wills, Trusts, Probate
To discuss any matter related to trusts, trust litigation, estate planning and probate in Southern California, call me at 714-522-8880 for a free consultation. I serve clients throughout Southern California, including but not limited to Anaheim, Buena Park, Cerritos, Compton, Downey, Fullerton, Gardena, La Mirada and Orange, Riverside, San Bernardino and San Diego. There’s never a need to travel to my office. I can handle your probate entirely over the phone, mail and e-mail, and I’ll also make all court appearances for you, so you don’t have to go to court. Call NOW for your FREE consultation.