A trust can be created in a California will by any method described in section 15200 of the California Probate Code. Generally, this involves inserting language indicating your intent to establish the trust, identifying property to be placed in the trust and designating a beneficiary and trustee charged with managing the assets of the trust. A trust created by a will is called a testamentary trust.
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Manifest your intent to create a will by inserting language in your will to this effect. For clarity, the trust portion of your will should have a unique heading and state that the trust does not come into creation until your death. Alternatively, a testamentary trust can be created by a document not a physical part of the will but incorporated by reference if the trust document is in existence at the time the will is executed and is sufficiently described in the will to permit its identification, but there are limitations to the value of property that can be devised in this manner (see Warnings).
Name the required parties. The trust language of your will must expressly identify yourself as grantor of the trust. A trustee must be named and successor trustees in the event the designated trustee is unavailable. A trust must also have beneficiaries or should grant the trustee the power to select beneficiaries.
Identify property to the trust. As testator and grantor, you can transfer all or part of your estate to the trust. Be sure the property is adequately described as to avoid confusion. Don't forget that under California's community property law, your spouse is the legal owner of half of all community property and property owned by your spouse cannot be added to your individual testamentary trust.
Provide the trustee with explicit instructions. Though not strictly necessary, a testamentary trust can include specific instructions that the trustee must follow. These include when and how to distribute property to the beneficiaries and to hire agents, brokers, investment advisors or lawyers on behalf of the trust. In addition to these powers given to the trustee, you can also include general provisions and instructions on how to terminate the trust.
Execute the document in the appropriate way. A California will must be signed by the person making the will and two adult witnesses. A separate writing need only be signed by the testator, but when making a trust the document should be signed and notarized.
Tips & Warnings
One of the most common uses of testamentary trusts is to protect assets you desire to leave to minor children. By establishing a trust on your death you can help ensure the assets will be appropriately managed until the point you wish the children to receive them. Consult a legal professional to be sure your testamentary trust accomplishes your estate planning goals.
If a writing not part of the will attempts to convey an article of tangible personal property worth more than $5,000 or totaling more than $25,000 -- as of December 2010 -- the conveyance will be invalid and the property disposed of according to any "remainder clause" of the will. Tangible personal property, however, does not include does not mean real property or intangible property, such as bank accounts, documents of title or securities.
References & Resources
- Cal. Probate Code:15200-15212
- Cal. Probate Code: 6300-6303
- Cal. Probate Code: 6130-6132
- San Diego Estate Center: Testamentary Trusts
- Medlaw Plus: Sample Testamentary Trust
- Bohm, Matsen Blog: California Trust Options: Living v. Testamentary
- Weblocator: California Estate Planning
- Free Advice: Testamentary Trusts
- Hemera Technologies/Photos.com/Getty Images