Legal Question in Wills and Trusts in California

Re: Revocable Living Trust Rules

Your Living Trust can be drafted to protect each other and your property until both of you pass away, leaving the remainder to your children. The language of the trust document is controlling and you should be able to read through your trust to determine if the trust provides the protections you need. Typically, to afford you the protections you desire, the terms of the trust would direct the trustee to divide the trust assets into 3 trusts at the death of the first spouse, two of which become irrevocable. If you do not understand the language of the trust,an attorney who drafts trusts should be able to help you make that determination. If you had an attorney draft the trust for you, he or she should be able to help you, and most likely without incurring much additional expense unless an amendment to the trust is needed. With regard to the question of whether the beneficiaries are entitled to a copy of the trust, typically the answer is no as long as the trust is revocable. The person holding the power to revoke the trust typically has the rights afforded any beneficiary. Once the trust becomes irrevocable, however, the trustee is required to provide a true and complete copy of the irrevocable trust, or irrevocable portion of the trust, to any beneficiary of the trust who requests it, and to any heir of a deceased settlor who requests it.

Re: Revocable Living Trust Rules

Under California community property law, each spouse owns an unndivided 50% of the property. Your situation is typical. But the answer lies in the wording of the trust.

Once the first spouse passes away, his or her 50% becomes vested and irrevocable. There are two types of plans we see. In one, where taxes are not an issue, each spouse typically gives all of the property to the other spouse. Now it is all owned by one spouse. And the children cannot demand anything nor even receive a copy of the trust.

In another, where taxes are an issue, we often see and A-B trust situation used to increase the tax free estate to the children. In this case, the estate of the first spouse to die goes into an irrevocable trust that benefits surviving spouse for life. Again, the children cannot get any property here, but they may be able to get a copy of the trust documents since they are now vested remaindermen. A carefully drawn trust should subordinate the rights of the remaindermen chidren to the rights of the spouses during their lifetimes.

With your concerns, there must be a reason, and it is best to review and edit the trust terms now to avoid any perceived issues in the future. If you have no attorney on this issue, I could help, even by phone and mail.

Re: Revocable Living Trust Rules

The answer is NO to both of your questions