How do default rules affect my estate planning documents?
Occasionally, you may want to "opt-out" of the default estate planning rules provided by the California Probate Code (a body of law that governs many estate planning transactions and events). The default rules within the Probate Code can provide bright-line guidance in situations where your estate planning documents may be silent as to what needs to be done. This can be extremely helpful in some situations and very frustrating in others. Here are some issues that come up from time to time.
Co-Trustees and Decision-making
Under California Probate Code Section 15620, "unless otherwise provided in the trust instrument, a power vested in two or more trustees may only be exercised by their unanimous action." This means that if you decided that you wanted 3 co-trustees of your trust and your trust doesn't state otherwise, then all 3 co-trustees would have to unanimously agree with the decision. This may be desired where you want complete harmony among the co-trustees, but it may not be desirable if you think there may be a conflict that will unnecessarily delay the administration or distribution of your trust assets.
Power of An Agent Under a Power of Attorney
A Power of Attorney can grant another person significant power over your assets; however, there are some areas where this power may be limited.
If you want your agent to be able to create, modify, revoke or terminate your trust, then the trust must specify that your agent under a Durable Power of ttorney may do so. California Probate Code Section 4264 describes other powers that your agent may exercise, but only if the Power of Attorney document expressly mentions them.
It's common for laws to provide a default framework. In some cases they are an accurate reflection of what most people want, but in others, you may need to strongly consider whether to deviate from them.