Taking the time to establish a trust in California can be an effective way to manage your estate and help ensure that your assets are distributed to your exact preferences. Trusts offer flexibility and privacy that can help you avoid the probate process in most scenarios. However, a trust can only be executed to your wishes if you fulfill all the necessary legal requirements. Working with a California trust attorney is highly advised to ensure that your trust can hold true for years to come.

Creation of the Trust Document

The first step to setting up your trust is to create a formal document. This legal document is typically drafted by your estate planning attorney. It states the purpose of the trust and identifies all the stakeholders involved. These people include:

• Trustor (the individual who creates the trust)
• Trustee (the person or entity who will help manage the trust)
• Beneficiaries (those who will benefit from the assets within the trust)

This document must outline exactly how the trustor wishes to manage and distribute these assets when the time comes.

Capacity and Intent of the Trustor

A trustor must have the legal capacity to create their own trust. What this means is that they must be of sound mind and at least 18 years old. They must also be able to clearly express why they want to create the trust. This is called their “intention” and is typically demonstrated throughout the trust document, such as when the trustor states why they wish to establish the trust and outlines the terms.

Proper Funding of the Trust

For a trust to be legally valid, it needs to be properly funded. To do this, assets must be transferred into the trust’s name. These can include various real estate properties, bank accounts, investments, and other forms of property owned. The process of officially funding a trust will vary, depending on what kind of assets are being included. It also may require an individual to change a title or deed to reflect the trust as its new owner.

Beneficiaries

A trust is required to have at least one beneficiary, but many include multiple beneficiaries. These can be specific individuals listed out by name, a group of people, or even an organization. The trust needs to clearly define who each of these individuals or entities are and provide a clear method for how they will be determined in the future.

Appointment of a Trustee

A trustee is the individual who will manage the trust. Like beneficiaries, the trustee can also be a sole individual, a group of people, or a professional entity, like a trust company. The trustee will have the fiduciary duty to manage the assets within the trust, and they must always act within the interest of its beneficiaries.

Trust Registration

Certain types of trusts in California will need to be formally registered with the state. This is especially true with charitable trusts. This process includes filing specific forms with the California Attorney General’s Office, which can be supervised and executed in partnership with your trust attorney.

FAQs

Q: Can I Set Up a Trust in California Without an Attorney?

A: While it is legally possible to do this, it is generally not advised. Setting up a trust is extremely complicated, with so many details that need to be in place to avoid jeopardizing the integrity of the estate.

Having an experienced attorney supervise the process can help keep your trust compliant with the law and provide peace, knowing that it can be executed to your exact wishes. An attorney can also provide additional helpful services, like guidance on choosing a responsible trustee, how to fund the trust, and strategies to address potential tax implications.

Q: How Long Does It Take to Set Up a Trust in California?

A: The length of time it will take you to set up your trust will depend on a number of factors, such as:

• How complex your estate is
• Which type of trust you want to execute
• How quickly you are able to gather and organize all your assets

A simple trust could only take up to a few weeks, while more complicated trusts that contain a long list of assets could take several months. The process will involve drafting the trust document, funding the trust, and completing all required registrations or transfers of property to avoid any additional delays in setting the trust up.

Q: Are There Any Ongoing Costs Associated With Maintaining a Trust in California?

A: Yes, there could be extra costs in the future that are associated with the maintenance of your trust. If you have chosen to have a professional management company or individual act as your trustee, there will be ongoing maintenance fees charged for their services. In addition, you could have to fund any legal fees when:

• Updating the trust
• Paying for additional legal counsel for advice
• Defending a trust dispute

If the trust generates any income throughout its lifetime, there are also tax implications to consider.

Q: What Happens If the Trustee of a California Trust Can No Longer Serve?

A: Sometimes, a trustee is no longer able to serve their duty due to incapacity, resignation, or even death. Fortunately, many attorneys advise you to outline a process for appointing a successor trustee if this were to happen.

If the trust isn’t clear on what to do when this happens, it may be required to go to court to begin the process of appointing a new trustee. This can complicate matters, which is why it’s important to work with an attorney early in the trust creation process. They can ensure that clear provisions for a successful trustee are detailed and cannot be challenged in the future.

Contact Sweeney Probate Law Today

If you are looking to set up a trust in California, contact us today. Our estate planning professionals can outline your options in great detail. Our firm can guide you on ways to take care of your estate and family.