Legal Question in Wills and Trusts in California

A trust does not fail because you take real property out of it. If that property was the bulk of the estate, it may be an under or unfunded trust but the transfer of property out of it does not negate all that was done to establish the trust.

The biggest mistake or "failure" of trust that I see in my practice is the failure of the client to put assets into the trust. The prior answer is technically correct because a trust that only transfers 10% of a decedent's assets on death has not failed in a legal sense but it has failed to avoid the probate of the remaining 90% of the assets and probably the reason for the trust in the first place was to avoid the expense and time delay and invasion of privacy of probate.

When a client hires an attorney to write a trust, the client should be aware that there are different levels of service and different prices offered. At the "high end" a trust lawyer will charges thousands of dollars to write a trust and will transfer all assets into the trust and call the client back for an annual consulation and charge for it. The more economical approach is the one I follow with my Nevada clients. I charge $675 to write a trust and all associated documents (such as pour over wills, health care powers of attorney, and deed transferring the residence into the trust) but at that price I only transfer Nevada real estate into the trust. The client must contact his or her bank and brokerage and transfer those assets. Plus, if the client subsequently buys a rental property or timeshare the client must remember my instructions to take title in the name of the trust.

With my low cost trusts I serve clients who mainly have less than a million dollars in assets and want a low cost alternative to probate wihout spending a lot.

Another issue is tax planning. In a practical sense a trust "fails" if it fails to help the client and his or her beneficiaries get maximum tax savings with respect to state and federal death taxes. In Nevada we don't have state death taxes and currently the federal estate tax has a $5,000,000 exemption so this is not an issue for my clients.

In summary, a client needs to determine the purpose of a trust. We have touched on just a few here. Then the client can find an attorney to meet those goals at a reasonable price. I discuss trusts more at my website, www.probatenevada.net

I disagree with Ms. Johnson. If the only property in the trust was real property, and is removed from the trust, then the trust fails as a matter of law. A trust with other property remaining in it, will not fail, but if the trust has no property, it is not a trust.