In California, the Probate Code has different types of trusts that have varying rules and purposes. Some trusts allow the beneficiaries to have a great deal of flexibility in how they use disbursements, while others are limited. In many cases, a trust’s primary purpose is to provide for another person’s needs or support. This kind of trust may be referred to as a support trust. If you have someone in your life that you intend to provide for in the future, you may ask: Do I need a support trust?
What is a Support Trust?
Under the California Probate Code, a support trust is a trust that uses all trust income and principal for the beneficiary’s education and support. A support trust is considered an asset protection trust. This means that, in general, a beneficiary’s creditors cannot reach the trust or its distributions to satisfy the beneficiary’s unpaid debts. However, this protection does not apply to outstanding child support obligations, overdue spousal maintenance, and specific other penalties. If a creditor is seeking payment from the trust, it would have to prove that there were funds available that are not necessary for the beneficiary’s support or education.
When Would You Need a Support Trust?
Support trust can be beneficial when you want to place assets out of reach of creditors and find a way to provide for your loved one’s educational and support needs. Recently, Kobe Bryant’s trustees went to court to amend his family trust to add his youngest child Capri to the family support trust. The Bryant trust’s intent appeared to be to have resources in place to provide for the family’s support throughout their lives and into the next generation. Having your assets and resources in a trust will allow them to benefit your intended beneficiaries while keeping them safe from creditor claims. This structure will also permit your property to bypass probate and remain in the trust when you pass away.
Contact an Experienced California Trust Attorney
Having an asset protection trust can be an excellent way to plan for your estate, safeguard your property, and provide for your beneficiaries. However, to protect the trust property from creditors, the trust must be properly created according to California law. By working with an experienced California trust attorney, you ensure that your support trust accomplishes its intended goals and is protected.
At the Law Offices of Alice A. Salvo, we are dedicated, professional, California trust attorneys with the experience you need to prepare your California support trust. Schedule a consultation today to learn more and start your solution. Give us a call at 818-676-9572 to schedule an appointment.