Should you consider a secret trust?

Establishing a trust is an effective way to avoid California probate. However, trusts are not a one-size-fits-all solution to every estate planning dilemma. While a revocable living trust can provide a conditioned transfer of assets outside the public eye, the trust’s beneficiaries are almost always aware of both the existence of the trust and its general terms.

A secret trust, in contrast, can be formed alongside a will. It can disguise, to some degree, the true nature of a transfer as well as its intended recipient. These trusts can help Californians spare their estate scrutiny, but they do not always represent the best way to protect either the trustor’s identity or their intent.

The Law Firm of Kavesh, Minor & Otis, Inc. can help you consider the risks and rewards of forming a secret trust before making a big decision.

The Secret Trust

In estate planning, a trust is a legal entity that can receive, hold, and manage assets. After a trust is formed, its founder—the trustor—may transfer assets to the trust’s control. Whether the trustor is entitled to use the trust’s assets is dependent on the type of trust that has been formed.

However, a secret trust is a type of trust that allows you to keep secret the identity of a beneficiary of an asset. For example, you might leave your son $10,000 in your will. However, you’ve communicated to him that after your death, you want that money given to an environmental protection charity and a political organization. Maybe you want this provision kept secret from your family and other beneficiaries because they did not share your political views or they did not approve of your involvement in environmental protection programs. By bequeathing your son $10,000, it appears that you intend for him to have this money; however, you created a secret trust, and your son holds the money as a trustee for these organizations.

Deciding Whether a Secret Trust Is Right for You

A secret trust can help Californians preserve their privacy. Forming a secret trust may be ideal for high-income professionals with significant assets or for other trustors who anticipate disagreements among their heirs. In either case, a secret trust can protect the trustor’s privacy, as well as the privacy of their family.

However, secret trusts have a significant drawback. Since beneficiaries may not be aware of the trust or its terms, they cannot easily challenge the successor trustee’s decisions, even if such decisions are irresponsible, inappropriate, or outright illegal.

The Law Firm of Kavesh, Minor & Otis, Inc. can help you assess your options and decide if a secret trust is right for you.

The Law Firm of Kavesh, Minor & Otis, Inc. for Your Estate Planning and Probate Needs

If you need to create an estate plan, update your current plan, or handle the estate of someone who’s died, The Law Firm of Kavesh, Minor & Otis, Inc. is here to help. We only handle estate planning and post-death administration, and together, our attorneys have more than 70 years of combined experience in these fields.

Our law firm has helped over 25,000 people in California leave a lasting legacy to their loved ones, getting to know each client, listening to their concerns, and learning about their needs and goals to create a plan that carries out their wishes. Additionally, we’ve implemented 4,000 plans after clients have passed away. Let us take care of you throughout the estate planning process. Contact The Law Firm of Kavesh, Minor & Otis, Inc., or call us at 1-800-756-5596.

When You Want the Very Best for Your Loved Ones, Choose Us.

Experience and Expertise. Estate planning and post-death administration are all we do. Our attorneys have over 70 years of combined expertise in the field, and three of our attorneys have passed an additional Bar examination and peer review process to become State Bar Certified Specialists in Estate Planning, Trust and Probate Law. Two of our attorneys also have Master’s Degrees in Tax Law, giving us unique insight into how estate tax and income tax will affect your family’s inheritance.

Customization and Attention to Detail. Before we create or update your estate plan, we get to know you, your goals, and what matters to you most. We take the time to listen to your concerns and attend to each of your unique needs and desires as if they were our own. When we complete your plan, we perform a detailed quality control process to help ensure your objectives are met. We also provide you with a personalized Owner’s Manual containing all of your important documents, and your Successor Trustee with a Manual containing helpful, plain-English checklists and easy-to-follow procedures.

Lifetime Relationship. All of our estate plans include a free ongoing service package. We take phone calls any time you have questions, perform free estate planning checkups every three years, and keep you abreast of changes in the law and planning strategies with our complimentary newsletters and educational seminars. And, when the time comes, we will be there to help your trustee and loved ones.