How modern trusts differ from traditional trusts
Many people in California decide to create a trust as part of their estate plan. If they have not dealt with modern trusts, they could be surprised to find out that irrevocable trusts are much different than the trusts that were used in the recent past.
Until just a few years ago, irrevocable trusts were managed by only one trustee or two co-trustees. The trustees would be responsible for completing all of the trust management duties including record keeping, tax filing and investing. Today, trust assets are often managed by several different trustees who each have specific responsibilities. The number of trustees and their functions will vary depending on the objectives of the trust.
One of the roles typical of a modern trust is an administrative trustee, also called a general trustee. The administrative trustee is responsible for keeping records updated and completing tax returns for the trust. One person, designated as the investment trustee, may handle all investment decisions for the trust. A modern trust may also include a distribution committee, which is a group of people with power to make trust distribution decisions. A trusts protector who is responsible for making decisions about the replacement of trustees may also be appointed to a modern trust.
An estate planning attorney can often describe the benefits of creating a financial trust to hold assets. Some trusts may require the appointment of several trustees while other less complex trusts can be managed by just one or two trustees. After looking into the details of a client's needs and assets, an attorney may suggest the type and structure of trust that would be most beneficial.