Tag Archives: California

A Trust is Not Totally Private

online-privacy-surveillance                                                                                                                                                 Advertisements have always touted privacy as a reason to establish a living trust.  And a trust is private when compared to a probate proceeding where there are public filings with the court that anyone can view including creditors and the IRS.  There are usually no corresponding public filings with the court for a trust unless there are problems with the trust.
                                                                                                                                                                Even for a trust with no problems persons named in the trust and relatives (including disinherited persons) will be able to obtain a copy of the trust in California and most other states. Likewise, beneficiaries of the trust will be able to find out the trust activities including all assets, income and expenses.  In fact, in California at least, beneficiaries are able to obtain an accounting back to the time a trustee has acted even retroactive to a period where the grantor was living.
                                                                                                                                                                If there is trust litigation then all trust information including the drafting attorney’s notes and testimony will be discovered.  In fact, in a highly contested trust matter you can expect that every little detail of the trust activity and assets will be revealed from the actual trust signing to amendments to the movement of assets.  Litigants are able to subpoena all of the information from the drafting attorney’s files, grantor’s records, trustee’s records, bank statements, checks, and brokerage records etc. All players touching the trust will have their deposition taken. When trust cases go to mediation, arbitration, or trial the judge expects that all of this information will be presented in an organized, cross referenced, and coherent manner. Anything filed with the court becomes available for public viewing and as time goes on more and more of the court files are becoming available on line.  Courts are very slow to “seal” the file.
                                                                                                                                                               So is a trust more private than a will and its corresponding probate proceeding?  Yes.  But can no one get information about the trust and its activities? No, there is always someone that can get trust information and sometimes it is exactly the person that you don’t want to see the information.