Legal Question in Wills and Trusts in California
Under what conditions may a living trust be dissolved? What are the implications for dissolving the trust, i.e. taxes, implications for lifetime beneficiary etc?
One of my best friends passed away and her longtime boyfriend of 30 plus years was named as a lifetime beneficiary in that the trust cited he has the option to remain living in the double wide trailer owned by his late girlfriend, in a nice trailer park in a suburb of San Diego, CA. My BFF, his girlfriend, passed away suddenly but she wanted to make sure he wouldn't end up homeless so some of the trust was in the process of being completed. The trust was supposed to have some money in it for him as a way to pay the HOA dues, taxes and insurance on the trailer, but she passed away before that could be in place as part of the trust to help support her longtime life partner. There was also some stuff going on with my BFFs sibling about the funds for this I think. All of a sudden, there is no funding in the trust to pay for taxes, dues, insurance, upkeep, etc.
I don't know if the trust is revocable or irrevocable. I know he will have to seek an attorney, but I'm just wondering what are the ramifications of dissolving a trust, whether it's revocable or irrevocable.
Thank you for any help or insight you are able to give.
1 Answer from Attorneys
A trust is normally revocable during the lifetime of the trustor, your best friend. Once a death occurs, it is normal that the trust for the benefit of someone else would be irrevocable.
It is possible that the terms of the trust provide for the money to be used for the benefit of the beneficiary and in the payment of the expenses indicated.
If there were no accounts in the trust it is possible that the Will of the deceased specifies that any and all assets subject to probate are payable to the trustee of the trust. Also, the trust may specify that certain accounts are a part of the trust even though the title to those accounts had not yet been changed.
With all that in mind, the Will should be reviewed along with the title to all the assets. The trust must be examined to determine what assets were assigned to the trust. When the title to the assets are known and the terms of the Will and Trust are understood, there should be a clear direction on what must be done.
It is possible that a probate must be opened to get all the answers on the assets and title issues. Once "letters testamentary" are issued to the executor in the Will, 3rd parties must release information to that authorized person.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
