Can you make your own trust?

Dear Len & Rosie,

Can I make my own trust? I made up my own will by following the guidelines. I have tried to look up the requirements of filing a trust in California, but I have been unable to find any. I have consulted many publications at the local community college but I have been likewise unsuccessful. Do you know of any publications or forms that I can get to make my own trust?

Sam

Dear Sam,

A will isn’t that hard to create for yourself. You can make a valid holographic will that distributes your estate, as long as you write it out in your own handwriting, and sign and date it. You do not need a witness. If you type out your will, your signature must be witnessed by two adults who will not receive anything from your estate.

People making their own wills may be better off making a California Statutory Form Will. Just search for it on the Internet. You can also download it for free from the State Bar web page at www.calbar.ca.gov under the link for “Will Form”. Or, contact us via www.lentillem.com and we’ll send you the form. Just follow the directions closely. The law does not readily forgive drafting errors.

But you want to make your own trust. Trusts are more complex. Most people do not understand trusts, and their subtleties take a long time to learn. For instance, in your letter, you talked of “filing” a trust. Trusts do not have to be filed or recorded. They are not meant to be public documents.

If you were to make your own trust, you could easily make fundamental mistakes which can render your estate plan unworkable after your death. You should take into account the age of your beneficiaries and their relationships with one another; the size of your estate and the eventual source of money to pay any estate taxes and debts that might be due when you die; disabilities of your children or other beneficiaries; what to do with retirement accounts, survivor’s pensions and deferred annuities; who is trustworthy enough to be successor trustee after your death; and many more issues.

If you still want to make your own trust, there are many books, computer programs, and webpages where you can create an inexpensive trust without a lawyer. Please understand that there is no particular product that we will endorse. We have reviewed many self-made trusts over the years. Most of them omit what we believe to be necessary provisions. If you create your own trust, you should, at the very least, have it reviewed by an attorney.

Finally, do not forget to transfer your assets into your trust so that they will avoid probate on your death. As a rule of thumb, everything should be in the trust except for automobiles, tax deferred accounts such as retirement accounts, annuities and deferred compensation, and it’s always better to keep your checking account out of the trust and add a trusted child to the account so he or she would have immediate access to some funds in the event of an emergency.

Len & Rosie

I didn’t like my father, but I would like some of his money

Dear Len & Rosie,

I am a 60-year-old woman whose father died about five or six years ago. We weren’t on speaking terms for many years. I have been wondering if I perhaps have some claim to his estate. Is there some way to check on this? He died in Los Angeles. I didn’t like my father, but I would like some of his money. Any information I could get would be greatly appreciated.

Carole

Dear Carole,

When your father died, he left behind a will or a trust, or he died intestate (without a will). If he had a will or trust, you would not be entitled to any money or property at all unless you were specifically named as a beneficiary, or if the will or trust was written so generically as to grant property and money to “my children”.

Most professionally written wills and trusts have catch-all disinheritance language that excludes relatives and anyone else not specifically named as beneficiaries. So unless your father had a change of heart, it is unlikely you are entitled to a portion of the estate.

If you were named as a beneficiary in the will or trust, or if your father died intestate, then you were eligible for a portion of the estate. The personal representative of your father’s estate (either the executor if there was a will, or the administrator if there wasn’t) had a obligation to notify all heirs and interested parties of your father’s death - even family members who may have been disinherited.  The executor must exercise diligence and make all reasonable attempts to locate potential heirs and only the judge may excuse a failure to serve the probate papers upon you by mail.

Even if you were named in his will, you have little chance for recovery. In order to sue the estate you will have to prove in court that the executor more or less intentionally failed to notify you. The court, which approved the probate proceedings after your father died, would be very unlikely to change its mind and order the other beneficiaries to cough up a share of their inheritance to give to you. Look at it from their perspective, “Five years ago, the court said we could have this money, and now they want it back?”

You should also keep in mind that your father may have had a trust that avoided probate altogether. You should check with the court clerk in Los Angeles County to see if there was a probate of your father’s estate. You could also check the chain of title to his former residence to see whether or not he ever owned his property within a trust. If he did, you should be able to determine the name of the trustee. Contact that person and ask for an explanation.

Remember that it’s almost certain that your father deliberately left nothing to you, given your estrangement. Keep this in mind when you decide how much of your personal effort, and money, you want to sink into this.

Len & Rosie