Registration of Trusts in California


In legal parlance, a trust is a legal arrangement where management and control over your estate or property is given to another individual or institution for your benefit. Among the advantages of establishing trusts are avoidance of probate and estate management costs and lengthy probate proceedings which can last from several months to a few years. When properly formed, trusts may even save on estate taxes.

Types of Trusts in California

  • Typically primarily used for probate avoidance, different types of trusts available for California residents include living trusts, also referred to family trusts and created while the person is still living, and testamentary trusts which are created by a will and become effective upon death. There are also married A-B trusts that become effective upon death of a spouse and qualified terminable interest property trusts which allow the surviving spouse to receive assets without estate tax liability upon the death of the first spouse.

Revocable and Irrevocable Trusts

  • Trusts are also classified as either revocable -- those that can be changed, revised or revoked while the owner of the trust is alive -- or irrevocable trusts which cannot be revoked or altered after being created. Living trusts where trustors are also beneficiaries are typically revocable. In such cases, the trust is considered part of the person's estate and subject to tax. Charitable trusts, trusts for children and insurance trusts are typically irrevocable. Irrevocable trusts have tax advantages not offered by revocable trusts.

Registering Trusts

  • Basically a contract, a trust document becomes valid once properly executed and signed. Registration is not needed as privacy of the beneficiaries is one of the benefits of setting up a trust. The state of California, however, requires advance health care directives, typically executed with comprehensive estate plans, to be registered with the Secretary of State. Written advance health care directives give family, friends and physicians information on such things as the trustor's state of health, treatment preferences and preferences for special treatment after death.

Processes Involved in Setting-up Trusts

  • While a trust may be immediately valid upon signing, it does not automatically become effective. The trust has to be funded by transferring assets into it. While trusts may be set up using commercially available and online forms, the process of gathering and valuing assets; contacting beneficiaries and successor-trustees; and maximizing possible tax savings through comprehensive estate planning may require the services of a competent attorney.


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