Creating a trust can take many forms, but in order for it to be honored by a court or government agency, it must be formed validly. California offers its residents several options for creating trusts that may be honored, depending on the nature of the trust being created and its intended use.
Since a trust is essentially the transfer of an asset from an individual to a trustee, methods for creating a trust are really just the various ways in which transfers might be made. The transfer may be made to the trustee during the life of the trust’s creator or it may be predetermined in a will or similar legal document that the transfer of the asset will be made up on the creator’s death. Once properly declared and specified, the trust is then created.
Trusts may also be created in some less conventional ways. The creator of a trust may, for instance, declare that as the owner of an asset, he or she is holding it as a trustee. The trust creator may merely make an enforceable promise to create a trust, and under certain circumstances, this may be honored.
While these are rather vague terms for describing very real, serious matters, that is the nature of a trust. It can be created very simply, and a poorly crafted trust will almost certainly cause more frustration and harm than help to its creator. Trusts created with vague terms often lead to conflicts between the benefactors and the trustee, and may end up draining the underlying assets in the process.
If you are considering forming a trust as a part of your estate plan, it is in your best interests to have the assistance of experienced, qualified legal counsel. An attorney with in-depth knowledge of relevant state and federal law can help you craft the perfect trust for your needs, with the confidence that it is exactly the tool you mean for it to be.
Source: Findlaw, “California Trust Laws,” accessed Nov. 03, 2016
