A Trust is a document which is an agreement between the person setting up the Trust (called the Trustor or Settlor) and the person who will manage the Trust assets (called the Trustee.) In many cases the Trustor and the Trustee are the same person or persons, and in most cases the purpose of the Trust agreement is to provide for the Trustor if the Trustor loses capacity to handle his/her/their finances and to distribute the Trustor's assets after death.
What is a revocable Trust?
Trusts can be revocable (meaning that you can cancel it or change it) or irrevocable (meaning that most of the time you cannot cancel or change it). The vast majority of Trusts are revocable during the lifetime of the person making the Trust and become irrevocable when the person making the Trust dies or loses capacity.
How is this different from a Will?
A Will is effective only on your death. A Trust can be effective both during your lifetime and after your death.
A Will governs “probate assets,” which are your assets that are in your name alone and that do not have a Beneficiary designation. A Trust governs assets that you transfer into the Trust estate.
If you have a Will and no Trust, your loved ones will have to open a probate in court in order to carry out your wishes. Assets that are transferred to a Trust do not have to go through probate.
A Will is a simple document that primarily does 3 things: it nominates someone to manage your money after your death, it provides guidelines for that authority and it says how you want your assets distributed after your death. A Trust is a more complex document that does those things, but it can extend the duration of the distribution, and for a married couple or a couple in a registered domestic partnership, a Trust can take advantage of tax benefits. There are also other reasons to have a Trust that are not within the scope of California Trusts Online’s website.
What are the benefits of having a Trust?
Because Trusts can be effective during your lifetime, if you lose the capacity to take care of your finances, someone else can step up to do that for you.
Assets that are in your Trust do not have to go through probate.
You can choose someone other than the Beneficiary to manage the assets that you give them. For instance, if you have minor children, someone else can manage the money for them until they become adults, or if you want to give money to a family member with special needs, someone else can manage the money for them.
What kind of Trusts can I purchase?
The type of Trust that California Trusts Online provides is a revocable living Trust designed to give someone else the ability to manage your Trust assets if you lose the capacity to do it for yourself and then to give away your Trust assets after your death.
When does a Trust operate?
Trusts can be effective during your lifetime and after your death, but they only govern the assets that you transfer into your Trust.
When can I change my Trust after I sign it?
As long as you have the mental and physical capacity to sign an agreement, you can change or revoke your Trust.
What do I need to do to change my Trust after I sign it?
You can change your revocable Trust with California Trusts Online by creating a Trust Restatement, but you are also free to talk to an attorney to change your Trust.
Can I change my current Trust?
If you already have a Trust that you wish to change, it is your responsibility to make sure that you have the authority to change it. California Trusts Online does not take the responsibility to make sure that your current Trust is revocable. Please read your current Trust to make sure that it does not say that it is irrevocable before preparing a new restated Trust with us.
Can California Trusts Online help me change my current Trust?
If you already have a revocable Trust that you wish to change, California Trusts Online can make those changes for you by restating your current Trust. The new Trust that you receive from us will replace your current Trust and update all of the terms of your current Trust. However, if you have already transferred assets (such as your house or bank accounts) into your current Trust, you will not have to transfer them into the updated Trust because the name of your Trust will stay the same.
What are Trustees?
Trustees are the people that you choose to manage your Trust assets. This includes making investment decisions, selling real estate and distributing your property after your death.
What are Beneficiaries?
Beneficiaries are the ones who receive your assets after your death. Your Beneficiaries can be family, friends, and charities.
What is a remainder Beneficiary?
After your specific gifts are distributed, whatever is left over is your remainder estate. The people or institutions that you choose to receive your remainder estate are your remainder Beneficiaries.
What are Trustors and Settlors?
The terms “Trustor” and “Settlor” are legal terms that refer to the person or persons who set up the Trust.
Do I have to list who gets my assets on my death?
Yes. Because no one knows what they will own at their death, it is better to give your estate away in percentages.
Can I give away specific items to specific people?
If you wish, you can give away a specific item to a specific person, and this questionnaire allows for up to three specific gifts like this.
Can I give dollar amounts to my Beneficiaries?
You can give a specific dollar amount to your Beneficiaries. To give a specific dollar amount, enter the information as a specific gift in the questionnaire. However, we recommend that you give percentages instead because you do not know what you will own on your death. If you decide to both give dollar amounts and percentages, the dollar amounts will be distributed first. So, your specific dollar amount gifts should be small so that your percentage Beneficiaries get as much as you intend them to.
How do I divide up my remainder estate?
You must tell California Trusts Online how you want your remainder divided up by percentages, and the total of the percentages must equal 100.
Can I give money to charity?
Yes, you can give money to people and to charities. Please be very specific about the charity you choose because many charities have similar names.
Do I have to name my Beneficiaries?
You can either identify your Beneficiaries by name or by class. Class is the general description of a group, such as “grandchildren” in the gift of “50% to be divided evenly between my grandchildren living at the time of my death.”
What if my Beneficiary dies before me?
You should name alternate Beneficiaries in case your Beneficiary dies before you. Some people choose the children of their Beneficiary as their alternate Beneficiaries so that if the parent dies first, the gift will go to the children.
What assets are included in my Trust distribution?
A Trust governs only those assets that are transferred into the Trust.
Can I use what I put into the Trust?
If you are a single person, your Trust will say that all Trust assets are to be used for your benefit during your lifetime. In the questionnaire, you will be asked how you want your Trustee to distribute your Trust assets after your death.
How do I transfer my home (or any other real estate) into my Trust?
If you wish to transfer real property in California into your Trust, the questionnaire provides a way for you to upload a copy of your current deed, and California Trusts Online will prepare a Grant Deed and a Preliminary Change of Ownership Report that transfers that property to your Trust. By uploading the current deed to California Trusts Online, you guarantee that you are the record title holder to the real property. California Trusts Online has no duty to verify your identity or title to the real property in question.
How do I transfer assets into my Trust?
If you wish to transfer bank accounts (such as checking, savings, and investment accounts) to your Trust, you will need to arrange this transfer with your bank. If you wish to transfer business interests, promissory notes (loans), or any other item to your Trust, you can list them on the questionnaire and they will be included on your list of Trust assets.
I am married (or have a registered domestic partner), but my spouse/partner does not want to make a Trust with me. Can I do it by myself?
If you are married or have a registered domestic partner, you may have a Trust just for you that will be the same as a Trust for a single person, but it will only cover your separate property and your one half of the community property.
Can married people make a Trust at California Trusts Online?
If you are married or have a registered domestic partner and you wish to set up a Trust together, you may have a Trust for all of your community property and all of your separate property. This Trust will instruct your Trustee to use the money for you and your spouse or registered domestic partner during your lifetimes, and you will be able to specify how you want your Trustee to distribute your Trust assets after the second spouse or registered domestic partner dies.
Someone is making me sign this Trust. What should I do?
If anyone is pressuring you to make this Trust and you do not feel comfortable signing it, you should call the Eldercare Locator at 800-677-1116 or 911.