California Trustees can charge reasonable fees for their services. The amount considered reasonable varies depending on the circumstances. Professional fiduciaries typically charge a certain percentage of the total value of the Trust assets (usually around 1%), while layperson Trustees (such as family members) often charge by the hour (typically around $30-$80). Trustees’ fees also depend on the amount of work it takes to administer the Trust. Some Trusts are more complex than others. If administering…

Minors in California (people under the age of 18) cannot own assets directly. Minors must own assets through a guardian. However, minors can be Trust beneficiaries. Typically, when a Trust is established with minor beneficiaries, the Trust terms require the minors’ shares to be held in Trust rather than distributed outright. Trust shares for minor beneficiaries are typically held in the Trust until the beneficiary reaches a certain age. Often, the young beneficiary’s Trust share…

How do Trust beneficiaries know how much they are entitled to? Often, rather than stating a specific dollar amount for each beneficiary, the Trust will state that each beneficiary is entitled to a certain percentage of the Trust estate. This can cause frustration if the Trustee will not provide the value of the Trust assets. Trust beneficiaries who are kept in the dark have a right to ask for information. In many cases, beneficiaries can…

Who is liable for Trust debts? Is it the Trustee, the Beneficiaries, or the Trust itself? It helps to remember that a Trust is a separate legal entity. The Trustees and beneficiaries are not personally liable for debts owed by the Trust. The Trustee is acting in a fiduciary capacity. The Trustee is required to gather the assets and pay the Trust debts. If the Trust does not have enough money to pay the debts,…

How does a Trustee resign? By following the procedure in the Trust document. The Trust terms usually contain a resignation procedure to follow. The Trustee typically must give notice to the beneficiaries and to the new Trustee. This notice can be drafted by a Trust administration attorney. If there is no resignation provision, the Trustee must follow the California Probate Code (CCP). California Probate Code Sections 15640-15645 govern the procedure for Trustee removal. What happens…

Generally speaking, inheritance is not subject to tax in California. If you are a beneficiary, you will not have to pay tax on your inheritance. There are a few exceptions, such as the Federal estate tax. However, an estate must exceed $11.58 million dollars per person in 2020 to be subject to estate tax in the U.S. The estate tax is paid out of the estate, so the beneficiaries will not be liable for paying…

A Trust is an entity that holds assets. Living Trusts are set up to benefit the Trust creators, (also referred to as the “Settlors,” or “Grantors,”) during their lifetimes. Living Trusts also provide the terms for management and distribution of the assets once the Grantors pass away. Living Trusts are typically drafted by an estate planning attorney. Once the terms of the Trust are established, the assets are transferred into the Trust. For example,…