Trusts are a common way for anyone who has amassed assets to dictate how those assets are used after their death. There are many forms of trust, each serving specific purposes, with the method of trust modification and termination in Covina depending on the type of trust.
The qualified trust attorneys at Amity Law Group, LLP, could recommend the form of trust best suited to your needs. They could also explain the procedure for changing a trust once it is established and advise you on how to dissolve an existing trust.
Changing a Revocable Trust
Many people use trusts for estate planning purposes. A properly drafted and executed revocable living trust enables assets to pass to your beneficiaries without the need for probate.
Avoiding probate is beneficial for several reasons. If the trust allows, the trustee can distribute assets to your beneficiaries immediately upon your death without waiting for probate to close, which typically takes several months or years. Probate can be expensive, with costs increasing as more assets become involved.
The primary benefit of a revocable living trust is that it allows the person creating the trust, the grantor, to change it or terminate it at will. It gives you control over all your assets and their disposition up until the moment you die or become incapacitated. Our attorneys in Covina could help you structure, modify, or terminate a revocable trust with a designated person to manage its assets in the event of incapacity.
Understanding Testamentary Trusts
Testamentary trusts are created through your will, with the trust only becoming effective on your death. You can continue to manage the assets earmarked for the trust until your death, selling or otherwise disposing of them as you deem appropriate.
Our trust and estate attorneys in Covina often create testamentary trusts for parents of minor children. Your will can designate assets to fund a trust. After your death, all assets in the trust will be managed by a trustee until the beneficiary reaches the age of legal adulthood or the age you designate, at which point the trust terminates.
While you are alive, you can change the trust by changing the terms of your will. Because the trust is not created until you die, removing the clause establishing a trust essentially terminates it. After your death, changing the terms of the trust would require the consent of the trustee and all beneficiaries or a court order.
How Can You Change or End Other Forms of Trust?
Trusts are also helpful for keeping property within a family, protecting assets from creditors, reducing tax liability, and providing for loved ones who are disabled or require long-term care. Most of these trusts are referred to as irrevocable trusts because the grantor cannot terminate them at will. However, there are procedures enabling these types of trusts to be changed or dissolved.
Like testamentary trusts, irrevocable trusts can be modified or terminated if all the beneficiaries agree to this. If there is disagreement among the beneficiaries, those seeking to modify or terminate the trust must bring a petition before the court.
The California Uniform Directed Trust Act provides an alternative method. The law allows a trust document to designate a third party, a trust protector, who has the authority to modify or terminate a trust under specified conditions. An attorney could incorporate a trust protector provision into a Covina trust agreement to enable a simpler modification and termination process.
Discuss Trust Modification and Termination Today With a Covina Lawyer
Trusts are helpful for numerous reasons, and many people choose to include one or more in their estate plan. If you are considering creating a trust, you may have questions about trust modification and termination in Covina.
The skilled attorneys at Amity Law Group, LLP, could help you find the answers you need. Get in touch with us today to discuss incorporating trusts into your estate plan.
