Define WHO the Children are in the Trust or Face Expensive Uncertainty

The BASIC PURPOSE of a Trust in Estate Planning

Image of young girls in the 1950sA trust that is typically used to plan for asset transfer for the next generation is known as a “living trust” and is revocable and changeable during the lifetimes of the trust creators.  If the trust creators (known as “Trustors” under trust law) have children and/or grandchildren the trust document will explain which children or grandchildren gets which assets and when.

Image of elderly man with adult son walking on beach

A Trust Can Be Set Aside and Disregarded if a Court Finds that a Trust Maker Lacked Capacity

PRESUMPTION OF CAPACITY

California law presumes that everyone has the mental capacity to make a trust.  Thus, if someone challenges a trust in court for lack of mental capacity it is up to the challenger to prove lack of capacity with sufficient evidence.

A Will Can be Set Aside and Disregarded if a Court Finds that the Maker Lacked Testamentary Capacity

PRESUMPTION OF CAPACITY

Doctor & PatientCalifornia law presumes that everyone has the mental capacity to make a will.  Thus, if someone challenges a will in probate court for lack of mental capacity it is up to the challenger to prove lack of capacity with sufficient evidence.

Can I Really Spend All My Inheritance Money, or Does Uncle Same Get a Portion?

DOESN’T MATTER IF IT COMES FROM AN ESTATE OR TRUST

taxableIs My Inheritance Taxable – Your inheritance of money or property may come from the estate of a deceased person or from a trust established previously.  These types of things are generally referred to as “bequests” or “gifts” as far as tax law is concerned.  People receiving bequests or gifts are referred to as “beneficiaries”.

How did that kid get so much money to blow!

18 is the age of majority

When a child turns 18 years he or she is considered to be an adult under California law. In legal terms, children under age 18 are called “minors” and when they reach age 18 they are called “adults”. Minors and adults are treated differently as far as inheritance rights are concerned. Minors still have rights to inherit but any inheritance which comes to them is subject to certain legal controls because the law presumes that minors are not capable of handling money or property as well as adults.

How Do You Figure Out Who Gets What? – Inheritance with Simultaneous Deaths

LEGAL BACKGROUND: 2 WAYS TO INHERIT

Under California law a person can inherit money or property (1) as a result of being named in a legal document such as a will or (2) inheritance can occur because a person is related by blood or marriage to the deceased if there is no will.

Image of two sisters angry with each other

My Sister is the Trustee and She Refuses to Pay My Share

Trust terminology basics

A trust is created by a written document known as a declaration of trust, and is then funded by transfer of money into trust bank accounts and/or deeding or transferring of properties to the trust.   The creator of the trust is known as the “Trustor” or the “Settlor.”  Trusts are usually prepared by attorneys because each trust is custom for the situation and there are many types of trusts.  The persons who are to receive money and property out of the trust are known as the “Beneficiaries.” The person or institution that takes care of the money and property of the trust is the “Trustee”.  The trustee is bound by law to follow the directions contained in the declaration of trust.

Image of young caregiver assisting woman from car.

Wills benefiting the attorney or caregiver are suspect

Abuses in formation of wills and trusts

In California over the last few decades there have been some situations whereby attorneys or caregivers have had wills or trusts prepared that benefit them. There was a famous case of a 95-year-old lady whose will left the bulk of her fortune to the people taking care of her. It turns out that the people taking care of her, known as “care custodians” had the will prepared under suspicious circumstances such that the 95-year-old lady probably didn’t know what she was signing. This and other similar situations led to recent legislation to correct abuses.

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