Q: What makes a real property trust valid in California?

A: Most people set up trusts with their names as the trust’s name (such as John Doe 2024 Trust), but I have had a number of people who select specific names for other reasons. One couple took the first two letters of their kids’ names and made up a word as the name of their trust. Others have used names that mean a lot to them. Using unique names like those as a trust’s name does not automatically mean the Settlor (the person who sets up the trust) is trying to hide assets from anyone. If a person owns real estate and places the property into a trust with a unique name, that’s all a public record that anyone can see. Just go to the County Recorder’s office in the county where the real estate is located and search the address. You’ll see the name of the trust. Some Recorders have their records online for the world to see. So, if you are trying to prove someone was hiding assets, you’ll likely need evidence of that intent other than placing real estate in a trust with a unique name that’s in the public records and easily findable. Best wishes.

A: Thank you for your question!

A spouse cannot hide her assets (if come from community property that belongs to marriage). I'm California, they use the trace-back method and track back the source of funds of each property to see if that property is a community property or not. All community properties are subject to split absent an agreement in another way.

This is merely a discussion of general laws and not legal advice. For legal advice, more specific facts and investigations are needed. I recommend you consult with an attorney for more details.

A: To create a valid trust for real property in California, the following elements must be present:

1. Intent: The settlor (person creating the trust) must have a clear intent to create a trust.

2. Property: The trust must hold identifiable real property located in California.

3. Beneficiary: The trust must have a named beneficiary or beneficiaries.

4. Trustee: A trustee must be appointed to manage the trust assets.

5. Purpose: The trust must have a lawful purpose.

If a real property is placed into a trust with the intent to hide it from or defraud a spouse, either during the marriage or in anticipation of a divorce, the trust may be considered invalid. This is because such an action would likely be seen as a fraudulent transfer, which is not a lawful purpose for creating a trust.

Similarly, if the real properties were placed in a trust under synthetic or fictitious names, it could be an indication of fraudulent intent, and the trust may be deemed invalid.

The amount of time that passes before the truth is discovered does not necessarily impact the validity of the trust. If the trust was created with fraudulent intent, it can be challenged and potentially invalidated regardless of how much time has elapsed. However, there may be certain legal time limits (statutes of limitations) that apply to challenging a fraudulent transfer or an invalid trust.

It's important to note that California is a community property state, which means that assets acquired during the marriage are generally considered jointly owned by both spouses, with some exceptions. Attempting to hide or transfer community property to avoid division in a divorce could be seen as a violation of fiduciary duties owed between spouses.

If you suspect that a trust was created to hide assets or defraud a spouse, it's best to consult with a qualified California family law attorney who can assess the specific facts of your case and advise you on the best course of action.