A trust is an agreement to hold property for the benefit of someone. Although this definition of a trust is oversimplified, there are just four main components of a trust: its purpose, property, beneficiaries, and the trustee. This article applies to California trust law and may help you decide if you need a trust attorney in your area.
How Do I Create a Trust?
A trust is created in one of five ways, but they all share common features. The first feature to create a trust is intent to create a trust. We use a written declaration, like, “I declare this is my trust and I am holding property for the beneficiaries of my trust” to show intent. Believe it or not, a trust does not need to be written! I have won a case in which I proved an oral trust, but it was more difficult to demonstrate intent to create a trust. Estate planning attorneys will caution that a written trust is best.
The second feature is that a trust needs trust property. It seems like a simple thing, but sometimes a trust is “unfunded,” meaning, the trust was declared but doesn’t have property. Sometimes property that was held in trust no longer exists because it was sold, destroyed, or given away already. For a trust to exist, it must have property.
Third, a trust must have a valid purpose. The “valid purpose” is any purpose that is not illegal or against public policy. For example, you can have a trust whose purpose is to encourage Roseville estate planning attorneys to give free consultations – this is a valid purpose. But you cannot have a trust whose purpose is “to encourage married persons to divorce,” since this is against public policy. In my estate planning firm we typically have clients that want to pass property to the next generation. That’s a valid purpose.
Finally, a trust must have an ascertainable beneficiary. As long as the trustee can figure out who should benefit from the trust, the trust will have an ascertainable beneficiary. In California, a beneficiary could even include an animal. Typically, the people who created the trust will be the beneficiary while he, she, or they are still alive and then someone in the next generation will be the beneficiary when the original trust creators pass.
A trustee, someone who manages the trust, is technically needed, but a trust will not fail for the lack of a trustee. So, while your trust must have a trustee at some point, a court can appoint a trustee if you haven’t chosen one that will accept the trusteeship.
Trust vs. Will – What’s the Difference?
A will and a trust have some similarities, but there are some key differences, not the least of which is cost. Trusts typically cost a fraction of the cost of a will in the long run. For a discussion of cost, see our blog about Aretha Franklin’s estate. Both will pass property from the deceased person to someone else, so the two are often compared. But if you own real property, are a blended family, or want to keep your family out of court (among MANY other reasons), a trust is the way to go.
Can I Make My Own Trust?
You could make your own trust, but I highly recommend you talk to us first. As an estate planning attorney who also litigates trusts, I have seen very poorly drafted trusts. A typical trust is between 15 to 60 pages long. A trust has to give someone all the power of ownership while giving someone else the right to enforce the trust terms and this is complicated! If you have your heart set on drafting your own estate planning, I have a video that will teach you how to make a will for free: How to Make a Will for Free. Before you set out to do your own estate planning, call us for a free consultation first. 916-282-9799
Do I Need an Estate Planning Attorney?
Estate planning attorneys, probate attorneys, and will and trust attorneys all practice in the same area of law. In my estate planning law firm, we draft estate plans, file petitions in probate court, and get orders for guardianship and conservatorship, among other services. Rarely do I encourage doing your own estate planning. But some plans, administrations, and petitions CAN be done on your own. However, why not start with a consult to see if you should DIY your own legal services?
How Much Do Estate Planning Attorneys Cost?
Famously, the cost of hiring an attorney depends on your needs. When clients hire our firm to draft estate plans we charge a flat fee, with packages that fit our client’s budget. For court petitions and administrations we charge an hourly rate. When you get your free consultation we’ll discuss your options to help you pick a plan to protect yourself and your family.
What is a Living Trust?
A trust can be a “living trust,” which you create while you’re still alive, or a “testamentary trust,” which you create at death, typically using a will. Estate planning attorneys omit “living” when referring to trusts for one simple reason. When we call a trust The John Smith Living Trust and John Smith has died, it doesn’t sound right… right?
What is Estate Planning?
Estate planning is comprehensive planning that protects you in life and protects your family at death. Estate plans typically include property transfer documents, durable powers of attorney (for a great description, see our blog on powers of attorney), and directives for health care. Think of an estate plan like a fire disaster plan with two major differences. First, you don’t plan to have a fire disaster – but your death is guaranteed. And second, fire disaster plans don’t have a default, but there IS a default plan for incapacity and property transfers at death (probate). To avoid the defaults, you MUST have an estate plan.
Do I Need a Will and Trust Attorney?
If you are asking if you need a will and trust attorney, start with our free estate planning attorney consultation first at 916-292-9799. It may be that you don’t need a trust and a simple will can do the trick. We’ll do the cost/benefit analysis with you and help you choose whether it is a good idea to do it yourself or hire a will and trust attorney.