Protection of personal information is an advantage gained when using a trust. Whereas a probated will is an announcement of an orderly succession of proprietary ownership to the world, and wills are available to anyone. Not everyone is comfortable with making that announcement and creating a record that could last centuries or even millennia. On the other hand, trusts can be secret, but even the secrecy they provide is not perfect. Disclosure is sometimes required as proof of ownership rights over an asset. However, California law accounts for that, and so California law permits a trust to be used for this purpose without being completely disclosed. For example, if a bank needs to know certain details of a trust in order to confirm ownership of an asset, Probate Code § 18100.5 ensures that the bank will know only what is necessary. It does so by allowing presentation of a “certification of trust” proving the trust’s existence, the trustee’s authority, the settlor’s identity, the manner of taking legal title, and other key trust terms. If this certification of trust is presented then there is no need to provide the full terms of the trust, so important information such as the identity of beneficiaries is not required to be disclosed.
If presented with a trust certification, then the requestor must accept that trust certification as if it were the actual trust instrument or potentially be liable for damages and attorney’s fees resulting from the refusal. Although there are some laws and regulations requiring financial institutions to ascertain into the identity of trusts heir beneficial ownership “as needed,” the required disclosures can be made without divulging the full trust instrument, thus maintaining the secrecy that the trust was intended to protect.
If you have questions or concerns about how these news reports may affect you or your business, please contact The Burton Law Firm at: 916-822-8700 or email info@lawburton.com for a consultation.
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California has required employers to “indemnify” employees for “necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer” in substantially the same terms since 1937 under Labor Code § 2802.
