Irrevocable Trust Beneficiary Rights California

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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 probate process, and the beneficiary can enforce their rights by filing a probate court petition.

Probate Topics, Probate Litigation 

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Irrevocable Trusts in California

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.

Irrevocable Trust Beneficiary rights california

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What is an Irrevocable Trust?

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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 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; 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. 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 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 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.

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 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 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 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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