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Can an Attorney who prepares a trust for a client also be the successor trustee of that same Trust?

Long Beach, CA |
Filed under: Successor trustee

Can an Attorney who prepares a trust for a client also be the successor trustee of that same Trust because the client insists on this arrangement?

Attorney Answers 3

Posted

Please note that I am not a CA attorney, but in most states, the answer is yes, the attorney can be named as trustee. In fact, this is not a terribly uncommon arrangement, though my personal stance is that I never accept appointment as a trustee unless the person is family or has no other options. Generally, I would prefer to name a bank or trust company as successor trustee, but I have reviewed many trust agreements where the drafting attorney is named as a successor.

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DISCLAIMER: THE INFORMATION PRESENTED HERE IS GENERAL IN NATURE AND IS NOT INTENDED, NOR SHOULD IT BE CONSTRUED, AS LEGAL ADVICE. THIS POSTING DOES NOT CREATE ANY ATTORNEY-CLIENT RELATIONSHIP BETWEEN US. FOR SPECIFIC ADVICE ABOUT YOUR PARTICULAR SITUATION, CONSULT A QUALIFIED ATTORNEY.

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Posted

http://www.leginfo.ca.gov/cgi-bin/waisgate?WAISdocID=84898310526+0+0+0&WAISaction=retrieve

In California, an attorney who drafted the trust which names the attorney as trustee is subject to removal and no other reason is needed. See the above code 15642(b)(6)

The attorney is "a person discribed" and you may search the sections listed here http://www.leginfo.ca.gov/calaw.html

To avoid this, the client must get a Certificate of Independant Review from a new attorney. The form of the certificate is in section 15642.

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10 comments

Stephen Scott Pearcy

Stephen Scott Pearcy

Posted

This is an incorrect analysis. Nothing about the question above suggests 15642(b)(6) applies because nothing in the question suggests the attorney is a "sole trustee" or a beneficiary.

Brad S Hindley

Brad S Hindley

Posted

"....... be the successor trustee....." suggest one trustee, not two. The question does not mention successor co-trustees. In any event, an attorney drafting a trust which names the attorney as successor trustee (not co-trustee) may be remove based on no further evidence, California Probate Code section 15642(b)6, unless the Certificate of Independant Review is obtained. Attorneys have a duty to inform clients of this section if the client requests the attorney to be the trustee.

Stephen Scott Pearcy

Stephen Scott Pearcy

Posted

Not true. Even if the attorney as successor trustee were treated as the "sole trustee," 15642(b)(6)) would still only apply if the trust included a "donative transfer" to the attorney who drafted the trust. Nothing in the question above suggested the trust would involve a donative transfer to the attorney who drafted the trust. The question was purely about whether the attorney could act as a successor trustee, and that is permitted and is common in CA.

Brad S Hindley

Brad S Hindley

Posted

An attorney drafting a trust which provides themselves a donative transfer requires a Certificate of Independent Review under Probate Code sections 21380 and 21384 to rebut the presumption of Fraud and automatic invalidity of the gift, or requires clear and convincing evidence. This Certificate is at section 21384. Probate Code section 15642 deals with being named trustee. This certificate is in section 15642. The two Certificates are different, compare them. An attorney will need both Certificates if the attorney is drafting a trust that both (1) names the attorney as trustee and (2) provides a donative transfer.

Stephen Scott Pearcy

Stephen Scott Pearcy

Posted

Again, this question didn't involve a donative transfer. The question was only whether "an Attorney who prepares a trust for a client [may] also be the successor trustee of that same Trust." The answer to that question, as framed, is "Yes."

Brad S Hindley

Brad S Hindley

Posted

15642(b)(6) reads "...... whether or not the person is the transferee of a donative transfer ......." Gee whiz, read section. This section applies to trustees only and a donative transfer is not required. transferor,

Stephen Scott Pearcy

Stephen Scott Pearcy

Posted

That simply means whether or not the "donative transfer" has actually taken place such that the drafting attorney became a "transferee." The trust would still need language making an attorney a beneficiary for your section to apply. If the trust only makes the drafting attorney a trustee and doesn't attempt to create a donative transfer, the the section doesn't apply.

Stephen Scott Pearcy

Stephen Scott Pearcy

Posted

To clarify: If the trust only makes the drafting attorney a trustee and doesn't attempt to create a donative transfer to the drafting attorney, then the section doesn't apply.

Brad S Hindley

Brad S Hindley

Posted

I give up. Think whatever you want. Know that it is a breach of duty for an attorney to draft a trust and name him/her-self the trustee without telling the client about the 15642 Certificate. The Certificate may be obtained before or after the execution of the trust. Geez, there are two different Certificates and they read clearly.

Stephen Scott Pearcy

Stephen Scott Pearcy

Posted

It's not a breach of any duty for the atty to name him/herself the trustee without telling the client about the 15642 certificate. All that certificate does is create a separate reason why 15642 wouldn't apply. It also wouldn't apply if: "based upon any evidence of the intent of the settlor and all other facts and circumstances, which shall be made known to the court, the court finds that it is consistent with the settlor's intent that the trustee continue to serve and that this intent was not the product of fraud or undue influence." The latter is usually no problem if the atty who drafts the trust isn't a beneficiary and is unrelated to the settlor. Actually, a 15642 certificate is even unnecessary in the case where the attorney IS a beneficiary if the latter quoted part applies. In any event, in CA, an attorney can be a successor trustee of the trust he/she creates, and that answers the original question.

Posted

As a VA attorney, I am unable to speak specifically to CA law. However, in VA, a drafting attorney can be named as a successor trustee in the trust instrument. Although, our State Bar requires such a drafting attorney to make certain disclosures to the client client, such as: 1) the client is not obligated to name the attorney as successor trustee, 2) there are other professional trustee options available (trust company, bank, CPA, another attorney), and 3) a current example of the attorney's typical fee schedule for such service.

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