![]() The change in status of the beneficiaries (new ones may be entitled to income or principal of the Trust) and the fact that the Trust now cannot be altered are two critical facts that must be communicated to the beneficiaries under California law. At that point, the successor Trustee is expected to either hold or distribute the assets as directed by the Trust instrument. ![]() With an average couple, when one spouse dies the Trust becomes irrevocable as to one half of the assets and when the second spouse dies, the entire Trust becomes irrevocable. Upon death, however, the Trust becomes irrevocable, at least in part. Until death, the Trust remains entirely revocable-the Settlor can alter or end the Trust at will. This article concentrates on the latter and includes a basic form required by the California Probate Code.Īs discussed in our article on Wills and Trusts, the average American now uses a revocable intervivos Trust (a “Living Trust”) to avoid the cost of probate when transferring estate assets to the next generation. One of the first duties a Trustee encounters is selecting the professionals to advise and notifying the beneficiaries of the change in status of the Trust. It’s not much harder that handling my own checkbook, really.” “It’s what Doris wanted me to do and I’m really doing no more than listening to professionals giving me suggestions and choices and making the choices. She stopped a moment, a bit surprised, then smiled and agreed. Three years later, as the Trust was filing its annual tax returns and she was directing the CPA as to appropriate tax planning for her allocated distributions, I commented that she had certainly mastered the duties and seemed very comfortable with fulfilling them. This writer well remembers one retired school teacher who at first baulked at the duties she confronted when her sister died naming her as the successor Trustee. Indeed, some courts have held that a Trustee is obligated as part of his or her duties to retain the right advisors immediately so as to accomplish the duties required under the Trust. In reality, the duties, while important, are not beyond the ability of the average person to accomplish if they are wise enough to retain the services of the appropriate advisors which almost all Trust instruments encourage. One who has not previously encountered a fiduciary duty may be overwhelmed by the obligations suddenly imposed, especially during what may be a time of grief. Upon the passing of the Trustor of a Trust, the successor Trustee must assume not only many of the duties previously undertaken by the now deceased Trustee, but often more since most Revocable Intervivos Trusts, upon the death of the people who first created it (the “Trustors” or “Settlors”) require distribution of the assets to the next generation or other people.
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