Irrevocable Trust Beneficiary Rights
Irrevocable Trusts- What You Should Know!
What is an Irrevocable Trust?
and what to consider when selecting your law firm.
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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.
Liability protection is another advantage because the settlor’s assets are shielded from creditors and judgements 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; however, California law does provide for modifications..
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.
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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. must 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 final say.
Schedule an appointment today. Our specialized team is ready to assist you.
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 their 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.
Our knowledgable and aggressive actions are necessary to ensure the trustor maintains their wishes on how the estate should be administered.
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What are some examples in which an irrevocable trust has been modified and/or terminated?
First, the irrevocable trust must be drafted with certain provisions which allow for modifications under special circumstances.
Some scenarios are listed below:
- When the principal has become too low to support administration.
- When a change in tax laws becomes necessary.
- Charity named as the beneficiary has changed its structure
- And many others.
Our advice, please contact one of our Orange County Estate Planning Attorneys. We are open to assist you with a free 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 record and are recorded with the county clerk.
Should you have any questions regarding an irrevocable trust, feel free to call Hess-Verdon & Associates at 949-706-7300.
To discuss your situation, to meet with us or to get your questions answered.
Are you a Beneficiary in Need of Counsel?
When a beneficiary is concerned that an estate has been compromised, he or she has the right to take legal action.
Disputes involving trusts include the following:
- Claims of breach of fiduciary duty
- Fails to make proper distributions: Under probate code 16000, a trustee has the fiduciary duty to administer the trust according to the trust instrument. Sometimes, a trustee is given “absolute” discretion over trust distributions. Even so, they must still work within their “Fiduciary principles”, i.e., be fair.
- Fails to administer the trust according to the trust document.
- The trustee “self deals” by using trust assets.
- A Trustee pays him or herself exorbitant compensation for serving as trustee.
- Failure to inform and report to beneficiaries
- Fails to make a timely accounting
- Violation of prudent investor acts, and trustee removal actions.
- Fails to properly invest trust assets
What are some initial steps we would recommend prior to contesting the trust?
- Get a copy of the trust agreement. All pages and amendments. It should clearly state the responsibilities of the trustee, how disbursements are to be made, documents that should be maintained, etc.
- Verify you have not waived your right to request a report. If so, you may be able to revoke the waiver.
- Contact an expert trust litigation attorney. Hess-Verdon offers a second opinion, normally at no cost to clients.
Should you find yourself in need of counsel, Hess-Verdon & Associates are well versed in all aspects from the Beneficiary standpoint.
Call today at 949-706-7300.
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