Most people who endeavor to create a trust in California are aware of at least some of the benefits. Two primary benefits are that, by creating a separate legal entity to hold property (that separate legal entity being the trust), the original owner of the property can: 1) confer benefits on a beneficiary by directing that the property be used in a specific manner (e.g. creating an educational trust); and 2) allow property to pass outside of the probate system. But California does impose specific requirements for a trust to be legally valid, and one of these requirements is that there be a named trustee.
Who Can Be a Trustee in California?
In short, pretty much anyone can be a trustee for a California trust. The person who creates the trust (called the “settlor”) can even be the trustee, as can one of the beneficiaries (although that may be tricky where the whole purpose of the trust is to prevent the beneficiary from using the trust property in unintended ways).
Many people ask a trusted friend or family member to act as the trustee of a trust, but, again, just about any person or entity such as a bank can be a trustee. The attorney who assists you in creating the trust can even act as a trustee, but there may be additional steps the attorney will want you to undertake to avoid potential conflicts of interest, such as having another attorney review the trust.
If you are not sure who you want to act as the trustee for your California trust, your estate planning attorney can likely make recommendations and referrals.
The Duties of a Trustee
Trustees are typically compensated for their efforts, as they have fiduciary obligations they must uphold in managing the trust. Common duties and obligations trustees will have in managing the trust include:
- Distributing property from the trust to beneficiaries per the terms of the trust
- Selling or purchasing trust assets
- Investing trust assets and proceeds
- Borrowing when necessary to manage the trust
- Incurring reasonable expenses (i.e. insurance) to manage trust assets
- Defending trust assets from legal threats and misappropriation
Thus, it is important to name a trustee who you believe will have the skills and integrity to manage the trust assets properly. Again, your estate planning attorney can offer counsel in this process and all other aspects of creating your California trust.
Create Your Trust With a Pasadena Estate Planning Attorney
Estate planning and probate attorney Christopher B. Johnson, located in Pasadena, California, has years of experience in all aspects of estate planning, and works with clients from all walks of life to create wills, trusts, and other estate planning devices that reflect their needs and those of their beneficiaries. To request an immediate consultation, contact him today at (877) 755-9178.