Trusts are one of the most useful tools in estate planning, and also one of the most misunderstood. Below are answers to some of the most common questions I hear from clients.
What is a trust? A trust is a legal arrangement in which a trustee holds and manages assets for the benefit of one or more beneficiaries. The person who creates the trust, called the trustor or grantor, sets the terms for how the assets should be managed and distributed.
When do I need a trust in California? A trust can be beneficial at any stage of life. Common reasons people create trusts include wanting to avoid probate, maintaining privacy over their estate, planning for incapacity, providing for a minor child or family member with special needs, or ensuring assets are managed carefully over time rather than distributed all at once.
What are the benefits of a trust in California? The main benefits include avoiding probate, maintaining privacy since trusts are not part of the public record, planning for incapacity, and providing specific instructions for how assets are managed and distributed. Certain types of trusts can also provide asset protection or tax benefits depending on the circumstances.
What are the disadvantages of a trust? A trust requires more upfront work and cost than a will alone. It also needs to be funded properly, meaning assets must actually be transferred into the trust, or it will not accomplish its purpose. Irrevocable trusts carry additional limitations since they generally cannot be modified or revoked once created.
How do I modify or terminate a trust in California? A revocable trust can generally be amended or revoked at any time by the trustor. An irrevocable trust is much harder to modify and may require court involvement or the consent of all beneficiaries. The specific process depends on the trust's terms.
If I have a trust, do I still need a will? Yes. A pour-over will works alongside your trust to capture any assets that were not transferred into the trust during your lifetime. A will is also the only place to name a guardian for minor children.
How much does it cost to set up a trust? The cost depends on the complexity of the trust and what it needs to accomplish. I offer flat-fee packages that include a revocable living trust along with the other documents that make up a complete estate plan. I am happy to discuss pricing during a consultation.
Do I need an attorney to create a trust? While DIY trust software exists, working with an attorney is strongly recommended. A properly drafted and funded trust is much harder to challenge and far more likely to accomplish what you intend. An attorney can also help you choose the right type of trust for your situation and make sure it is integrated properly with the rest of your estate plan.
What are the different types of trusts? Common types include revocable living trusts, irrevocable trusts, special needs trusts, pet trusts, charitable trusts, spendthrift trusts, and testamentary trusts created through a will. The right type depends on your goals and circumstances.
Can anyone in California benefit from a trust? Yes. Trusts are not just for the wealthy. Anyone who wants to avoid probate, maintain privacy, plan for incapacity, or provide carefully structured support for a loved one can benefit from a trust.
What happens to jointly owned property when one spouse dies? If property is held in joint tenancy, it typically passes automatically to the surviving spouse without going through probate. However, the outcome depends on how the property is titled, which is worth reviewing with an attorney.
How can I make sure my pet is cared for after I die? A pet trust is the most reliable option. It sets aside funds specifically for your pet's care and provides enforceable instructions for a named caregiver. California expressly recognizes pet trusts under the Probate Code.
Have Questions?
If you do not see your question here, call me at 310-213-7711 or schedule a consultation online. I work with clients throughout California.
Disclaimer: This FAQ is for informational purposes only and does not constitute legal advice or create an attorney-client relationship.
