Anaheim, CA asked in Estate Planning for California

Q: Adding beneficiary

Hello,

If i am adding a beneficiary to my trust and wish to assure them I will not remove them as beneficiary ever, is there a legal agreement that can be signed stating they and I must mutually agree before they can be removed?

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4 Lawyer Answers
Jeffrey Louis Gaffney
Jeffrey Louis Gaffney
PREMIUM
Answered
  • Estate Planning Lawyer
  • Carlsbad, CA
  • Licensed in California

A: So you want to protect them from you ever changing your mind?

They only way I can think of doing that would be to have a new irrevocable trust (I am assuming your current one is a Living/Revocable Trust). As long as you are alive you can always change your Living Trust.

You could gift them the asset now of course.

Or you could give it to them now, but keep the right to use it during your lifetime ( a life estate, seen mostly in real estate). That usually has detrimental tax consequences though, depending on how long you have owned the asset.

1 user found this answer helpful

Maurice Mandel II
Maurice Mandel II
Answered
  • Newport Beach, CA
  • Licensed in California

A: I agree with Mr. Gaffney, the area of your primary concern should be what is the tax affect going to be with respect to any irrevocable transfer to your new beneficiary. Including the potential conversion of a revocable trust to an irrevocable trust. You really need to consult a good estate planning and tax attorney in your area before taking any action that you will regret.

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Nina Whitehurst
Nina Whitehurst
PREMIUM
Answered
  • Estate Planning Lawyer
  • Crossville, TN
  • Licensed in California

A: It is possible to enter into a contract sometimes know as "agreement to make a will (or trust)." Such agreements are enforceable if the statutory requirements are met. Typically it is done when the promise of an inheritance is made in exchange for goods or services provided during lifetime. An experienced estate planning attorney can help you with this.

Chris M. Bradford
Chris M. Bradford
Answered
  • Estate Planning Lawyer
  • Santa Monica, CA
  • Licensed in California

A: You are the one in charge because you are the one creating or changing your trust. You have no obligation legally or morally to lock yourself in for the benefit of a beneficiary. You could just say: "Look I have provided for you. I am not planning on changing my mind. I don't need to lock myself into a gift to you. So I am not going to. You are just going to have to live with that." Or words to that effect.

However if you really want to lock yourself in, you should consider an "Irrevocable Trust." Instead of adding this new person to your existing trust, you create an entirely new document called an "Irrevocable Trust". This additional separate trust can be set up exclusively for the new beneficiary. In an Irrevocable Trust you ARE locking yourself in. After you sign it, you cannot change it. If that is what you really want. It is hard to anticipate changes that may occur in the future. that is why generally Irrevocable trusts are not a good idea.

As the other attorneys have stated, you also must consider the tax consequences of making a gift like this.

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