California revocable trusts are a common element in estate planning. The advantage to a revocable trust is simple: it is frequently used to avoid the rigors of a probate proceeding. While this type of trust can be very useful, occasionally it can be a little more complicated than it sounds.
What are the basics of a revocable trust? A revocable trust becomes irrevocable when the trust maker - known as the settlor or trustor - passes away.
The beneficiary of a parent's or family member's revocable trust will receive assets subject to the terms of the trust. The requirements of the law essentially become a part of these terms. Even though beneficiaries have lawful rights to trust assets, such rules fundamentally mean that the beneficiaries get paid last.
The government claims priority over everyone else - U.S. and California tax obligations are paid first. Trust administrative expenses related to mortgages and deeds of trust are paid. Funeral expenses and the expenses of the last illness are paid. Then wage claims and general debts are also paid. Trust-related and allowed attorney's fees are also paid. Finally, once all these expenses are checked off, you as the trust beneficiary can receive your rightful distribution.
California estate law can be complicated - it's part of our work here at Hackard Law to make it straightforward for clients as we protect their interests. It helps to be armed with knowledge. If you need additional information as to beneficiary distribution rights, give Hackard Law a call: (916) 313-3030.