LIVING (REVOCABLE) TRUSTS AND TRUST ADMINISTRATION
A Revocable Trust provides much more than simply the avoidance of a lengthy, costly court-supervised procedure. The most common form of trust is called a Revocable Trust (sometimes called a Living Trust) because the Trustor, the person who executes the trust, may revoke the trust at any time while they are still living and have legal capacity. Once someone dies, however, the trust becomes irrevocable, meaning its contents may not be changed, at least not without costly court review and possible litigation. Like a Will, a Trust provides for the orderly distribution of a person’s assets after death. Trusts are usually much longer and more complex than wills and thus cost more to execute than wills. Complexity comes in the face of multiple assets, real property out-of-state and in the case of second marriages where there the Trustor want to leave assets to children of a former marriage. Your bank accounts, brokerage accounts and your house and other property are transferred into the trust, often changing title. Some attorneys handle these transfers for you. The savings with a trust will happen after your death, during the trust administration. Trustee’s fees are a very small percentage of the assets in trust; and attorney fees are usually hourly and will not amount to the probate statutory fees. It is a good idea to ask your attorney to compare trusts and wills for you. After providing the attorney with the necessary information about your assets and your family, a good attorney will be able to determine the most effective document to carry out your intentions.
REVOCABLE TRUSTS AND INCAPACITY
Unlike a Will which is only effective to distribute your assets at your death, trusts can have a very important role to play while you are still alive. For one, trusts have incapacity language. Should you, the Trustor, become for any reason or for however long, unable to properly manage your property, finances, or benefits, a named successor trustee may step in. That successor trustee is authorized to exercise those powers of the trustee enumerated in the trust document. Because of the extent of these trustee powers during your life and after your death, the trustor needs to designate a successor trustee who is trusted to make decisions in your best interests.
IF YOU HAVE PETS OR “COMPANION ANIMALS”
For many people of all ages pets are wonderful, sometimes necessary companions. We care for them as we would children and, like children their needs will continue even if we are no longer here. California has legislation signed into law by former Governor Schwarzenegger (Probate code Sections 15200- 15212) which makes it easier to set up enforceable pet trusts in which you may leave money for the care of a pet. There are different kinds of pet trusts, a discussion of which would take up too much space here to describe. There are numerous resources for these types of trusts and continued care for a pet, one of the most obvious being the California Society for the Prevention of Cruelty to Animals. You can google “pet trusts” and find a wealth of resources. Because pets are so important to our lives, there is also language in the Durable Power of Attorney regarding the care of your pets should you become incapable of caring for them. It is never too early to think about this – and do something.