Estate Planning in California: Certificate of Trust

Once a person has written a trust, they are left with a rather long document. Trusts can range from a few pages to? forty pages or more. Given the burden of lugging around a burdensome document, California law allows for a person to create a certificate of trust to provide third-parties in lieu of providing the trust document itself.??


A certificate of trust may contain the following information per Prob C ? 18100.5(b)

(1) The existence of the trust and date of execution of the trust instrument.

(2) The identity of the settlor or settlors and the currently acting trustee or trustees of the trust.

(3) The powers of the trustee.

(4) The revocability or irrevocability of the trust and the identity of any person holding any power to revoke the trust.

(5) When there are multiple trustees, the signature authority of the trustees, indicating whether all, or less than all, of the currently acting trustees are required to sign in order to exercise various powers of the trustee.

(6) The trust identification number, whether a social security number or an employer identification number.

(7) The manner in which title to trust assets should be taken.

(8) The legal description of any interest in real property held in the trust.

Two benefits of writing a certificate of trust is that it is (1) much easier to carry around to due its shorter length than a trust and more importantly (2) the certificate of trust maintains the trust's privacy as to distribution specifics, the most confidential part of the trust. One reason why people choose to write trusts is because of the privacy aspect. Generally speaking, a trust document will not become a public record as opposed to a will. A certificate of trust ensures that the trust's privacy remains intact. In particular, the relevant part of the statute reads "The certification of trust shall not be required to contain the dispositive provisions of the trust which set forth the distribution of the trust estate." Prob C ? 18100.5(d).?

It is standard practice for an attorney to write a certificate of trust for the client along with the trust. This is not particularly difficult for the attorney because the trust contains the required contents of the certificate of trust.?

A certificate of trust is commonly used when a settlor, the person who wrote the trust, wishes to transfer their bank account into the trust. When I meet with clients when all estate planning documents are signed, I explain to them the importance of transferring title to their bank account from themselves to the trust by using the certificate of trust. The bank will often copy the certificate of trust for future reference. Still it is appropriate to not assume that the bank will always have a copy on file. Hence, it is prudent to keep the certificate of trust in a safe place.??

If a third-party refuses in bad faith to honor the certificate of trust, they may be liable for damages and? attorney fees. Prob C ?18100.5(h).? Thus, the law has teeth to it to deter a third-party from being overly demanding by insisting on seeing the trust document instead of the certificate of trust.?

If you have any questions please call my office at (408) 866-8382 for a free consultation or email me at s.miri@mirilaw.com.

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