There are many types of California trusts designed to accomplish all types of things. This writing will cover only the type of trust designed:
- To transfer your assets after your death efficiently; and
- To ensure that your assets are managed for your benefit if you cannot manage your assets anymore in the future for some reason.
A Trust Makes Sure Your Assets Are Handled the Way You Want by the Trustee for the Benefit of the Beneficiaries
A trust is a document that creates relationships for management of your assets among people that you select. As the creator or the person signing the trust you’re known as the settlor (also known as trustor or grantor). The trust names a series of people to be in charge of managing your assets. The person in charge is called the trustee. You also name people to benefit from your assets, who are called the beneficiaries.
In summary:
- The settlor creates the trust and determines what the trust says;
- The trustee carries out what the trust says; and
- The beneficiary benefits from what the trust says.
You Remain in Control as Trustee and Benefit from Your Assets as Beneficiary, Unless You Want Otherwise
Most likely you will name yourself to be in charge as the first trustee. And you will name yourself to be the first beneficiary benefiting from the assets. That way you continue to manage your assets for your own benefit as you always have.
The next trustee in line will take over if you become unable to manage your affairs. Then that person will manage your assets for your sole benefit until your death because you are the initial beneficiary of your trust. You will receive the benefit from your assets until your death, regardless of who is the trustee.
It’s common for a trust to be for the benefit for two people such as a married couple.
A Trust Also States Who Will Receive Your Assets After Your Death
The key to transferring assets at your death is that the trust also states who the beneficiaries will be to receive your assets after your death. Your assets will go to those people after you die.
A Properly-Setup Trust Avoids a Conservatorship Court Proceeding and a Probate Decedent’s Estate Court Proceeding
Without a properly setup trust, there is a very good chance that the court will be involved with you or your affairs at some point through a conservatorship court proceeding or a probate decedent’s estate court proceeding.
You Must Transfer Assets Into Your Trust
None of this will work unless you transfer your assets into the trust. Otherwise, the trust terms will not apply to those assets, and the trust will be a powerless piece of paper.
