What Is the Difference Between a Trustee and a Settlor on a California Revocable Trust?

By River Braun, J.D.

What Is the Difference Between a Trustee and a Settlor on a California Revocable Trust?

By River Braun, J.D.

The trustee and the settlor of a California Revocable Trust have different roles and responsibilities. A settlor is the person who creates and funds the trust. The trustee is appointed by the settlor to administer the trust. The same person can perform both of these jobs or different people can act as settlor and trustee. Either way, the first step is to create the trust.

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Creating a California Revocable Trust Agreement

A trust is a written document that creates a legal entity to hold ownership of assets. If you are the settlor, you transfer ownership of assets to the trust for your benefit during your lifetime. The trust is revocable; therefore, you can revoke it and reclaim the assets. Upon your death, it becomes irrevocable, and the assets are managed or transferred to the beneficiaries you named in the trust agreement.

In most cases, a settlor serves as the trustee of the revocable trust. By serving as both, you are in complete control of the assets and their management.

Naming Another Person as a Trustee

In some cases, a settlor may want to name someone else as trustee. That person is then responsible for managing the assets according to the trust's terms and for the benefit of its beneficiaries. As settlor, you remain the primary beneficiary during your lifetime, even though you are not the trustee. Your beneficiaries still receive the remaining assets of the trust after you pass away.

Even though you name another person to serve as the trustee, you retain the right to revoke the trust. You can reclaim the assets and terminate the trust.

A revocable trust should include provisions that state what is to be done if the settlor becomes incapacitated. If you are serving as the trustee and your mental state impedes you from managing your affairs, a successor trustee, named in the agreement, assumes control over the trust. The successor trustee continues to manage the assets according to the trust's terms for your benefit. Upon your death, the trustee disburses the assets to the beneficiaries.

Benefits of a California Revocable Trust

Revocable trusts are extremely flexible. If you change your mind, you can reverse your decision later. This makes these trusts appealing to many.

Another benefit of revocable trusts is the management of assets during disability. Because your successor trustee assumes responsibility if you become mentally incapacitated, there is no need for a court to appoint a conservator to oversee the trust.

Lastly, revocable trusts also maintain privacy by avoiding probate. Property passes directly to the beneficiaries upon your death. Your heirs do not need to worry about the time and expense of administering a probate estate to obtain access to the trust. Assets can be immediately used to pay family members' living expenses and bills.

Revocable trusts also have some disadvantages. They do not provide the same level of asset protection as an irrevocable trust. You must also transfer the title to assets and register the transfers with the proper government offices. However, for many people, the advantages of revocable trusts outweigh the disadvantages.

If you have questions about California trusts and estate-administration, consider talking with an online service provider.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.