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Irrevocable Trust and Beneficiary Rights
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What is an Irrevocable Trust?

The term “irrevocable trust” refers to a type of trust that is not subject to change, i.e., modification, amendment, or termination, without the permission of the beneficiary or beneficiaries. It is essential to select the proper irrevocable trust as unwinding it may have tax implications.

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Irrevocable Trust Beneficiary Rights

California Probate Code §16060 protects the Beneficiary rights in California on irrevocable trusts. It states the trustee has a duty to keep the beneficiaries reasonably informed of the status of the trust administration process, and the beneficiary can enforce their rights by filing a probate court petition.

Irrevocable trust California

Irrevocable trusts mean that the grantor gives up control and ownership of their property. As a result, the trust assets are protected from taxes and the grantor’s plus beneficiaries’ liabilities. Typically, an irrevocable trust cannot be modified after assets are transferred into the trust. However, in special circumstances, California probate Code section 15403 allows for revocation and amendments to an irrevocable trust.

State: California Irrevocable Trusts
Practice Area: Trusts and Estates

Southern California Counties: Orange County, Los Angeles, San Diego, Riverside, San Bernardino, Kern County, Ventura County

Central California Counties: Santa Cruz County, San Benito County, Fresno County, San Joaquin County

Northern California Counties: Alameda County, Contra Costa County, Marin County, Sacramento County, Santa Clara County, San Francisco County, San Mateo County

California Irrevocable Trusts 

Irrevocable trusts in California play a significant role in Trust and estate planning with a focus on minimizing estate tax and personal tax. The grantor gives up control of the assets, which allows for long term savings and protection from creditors and legal judgments, including a more natural path to distribute assets to the beneficiaries.

How do you remove a trustee from an irrevocable trust

With an irrevocable trust, you should get written consent from all parties, i.e., the trustor (trustmaker), beneficiaries, etc. The issue remains, however, that it may have to go to probate court to change the trustee.

What is an Irrevocable Trust?

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Choosing the Right Type of Trust is Paramount

An irrevocable trust is a type of trust that is permanent meaning it cannot be changed once created.  It is designed to give the grantor/settlor the ability to lower their estate taxable rate while giving to charity, heirs, and beneficiaries.  A revocable trust is the opposite in terms of how one can change the trust.  See the differences between a revocable trust vs. irrevocable trusts.

Liability protection is another advantage because the settlor’s assets are shielded from creditors and judgments against him, as the settlor no longer owns the property.

Once the irrevocable trust is completed, the grantor gives up full control and ownership of the property; which some might consider a disadvantage of an irrevocable trust, however, California law does provide for modifications.. 

Read on.

What are the Beneficiary Right in California on Irrevocable Trusts

California Probate Code §16060 protects the Beneficiary rights in California on irrevocable trusts. It states the trustee has a duty to keep the beneficiaries reasonably informed of the status of the probate process, and the beneficiary can enforce their rights by filing a probate court petition.

Can an irrevocable trust ever be changed?

Now, there are special circumstances that an irrevocable trust can be changed but calls for a trust lawyer to help in the following:

  •  Everyone who is listed in the trust, i.e., beneficiaries, heirs, etc. should unanimously consent to the trust being modified or terminated. Under California Probate Code section 15404(a), if all of a trust’s settlors and beneficiaries unanimously approved amendment or termination of the trust, they can do it without court approval.
  •  If no unanimous consent from the beneficiaries, a trustee may ask the court to modify or terminate if the continuation of the trust would defeat or impair the spirit in which the trust was established. A petition to the court to modify or terminate an irrevocable trust under the “changed circumstances doctrine”.

 If you live in California, our Orange County Trust Attorney firm will assist in the needed documentation. Just one note, however, if there is no unanimous decision, the probate court will have the final say.

I am a beneficiary to a trust, are their laws to allow me to know the right to information?

Beneficiaries have legal rights.  California Probate Code §16060 provides as follows:

“Trustee’s general duty to report information to beneficiaries. The trustee has a duty to keep the beneficiaries of the trust reasonably informed of the trust and its administration.”

The idea is that the beneficiaries are entitled to obtain information reasonably necessary to enable them to enforce there rights.  Should a beneficiary feel they are not being provided the needed information, they can file a probate court petition via a probate litigation attorney and get a court order to compel the requested information.

As a beneficiary, you should be able to know and receive the following:

  • Information about the trust assets
  • A copy of the original agreement and any amending papers.
  • Trust Administration updates

Now, if you are looking for an accounting, you may or may not be entitled to the information.  You do, however, can receive bank statements, etc. to allow you to make an informed decision.

What are some examples in which an irrevocable trust has been modified and/or terminated?

First, the irrevocable trust should be drafted with certain provisions that allow for modifications under special circumstances.

Some scenarios are listed below:

  1.   When the principal has become too low to support the administration.
  2.   When a change in tax laws becomes necessary.
  3.   Charity named as the beneficiary has changed its structure
  4.   And many others.

Our advice, please contact one of our Orange County Estate Planning Attorneys.  We are open to assist you with a second opinion review of your case.

Are irrevocable trusts public record in California?

In California, if a trust does not hold real estate property, then all assets held in the name of the trust are kept private.

If however, once a record of a real estate transfer is made, all the details of the deal, i.e., the price, transfer dates, etc., become public records and are recorded with the county clerk.

Should you have any questions regarding an irrevocable trust, feel free to call Hess-Verdon & Associates.

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Ultimate Guide: Irrevocable Trust Beneficiary Rights California

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Request a no-obligation case review today. Feel free to call, and our helpful staff will set you up with one of our specialized attorneys. Ultimate Guide: Irrevocable Trust Beneficiary Rights California

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