22nd Feb 2013
In California, one of the mechanisms used to avoid probate is the Living Trust. In a Living Trust, the assets of the estate owner (called the Trustor) are transferred to a trust. The Trustor names a Successor Trustee to manage his trust when he dies or becomes mentally incapacitated. In such a case, the assets in a trust do not have to pass through the costly and time-consuming process of probate.
Sounds simple enough? Yes, but you still would be best served if you have expert legal advice on your side. And that is whether you are the Trustor, Successor Trustee or the Beneficiary.
If you are the Successor Trustee, your first order when the Trustor dies is to seek the help of a good probate lawyer in California to review the terms of the trust.
As the Successor Trustee, you have to adhere to the many rules and stipulations of the trust – or you may be held liable by the beneficiaries. In other words, if even one or more of the beneficiaries feel you are mismanaging the trust, then they can sue you in court. You also have to perform tasks which may require expert legal and accounting advice. These duties include informing the decedent’s creditors and beneficiaries of the death of the Trustor. California law mandates the Successor Trustee to send notices to the beneficiaries within 60 days. When they receive their notices, they have 120 days (from the actual date of mailing) to file a contest.
A Successor Trustee must also take care of filing tax returns on behalf of the trust, make thorough accountings of the trust assets, expenses and cash flow. Of course, he must not miss out on the distribution of assets to the trust beneficiaries. As Successor Trustee, he can also look for ways to invest the trust assets and make it grow. However, he must do so in compliance with California laws and within the terms and conditions of the trust.
Beneficiaries should also consult experienced probate lawyers in California. With an experienced attorney, you just don’t do things by “hunches” or intuition; your lawyer can advise you as to whether or not the trustee is managing the trust assets properly. He can also monitor the accounting of the trust to make sure these are proper and timely. And of course, he will check whether the distribution of assets is done properly. Certainly if your lawyer can gather evidence of mismanagement of the trust, then you as a beneficiary should maintain his professional help as you pursue legal action.
With a Living Trust, you have a legal mechanism to avoid probate. But whatever your role in the trust – Trustor, Successor Trustee or beneficiary, it is always best to have the assistance of an expert probate lawyer in California.