Sometimes a client can get the best of both worlds in terms of technical competence and familiarity with his or her family situation by nominating a personal accountant or lawyer to act as Trustee. The accountant or lawyer, however, must not make the decision to serve lightly as there are possible business and legal consequences of serving as a Trustee of a client's trust.

Firstly, the accountant or lawyer may make significantly less in compensation by serving as a Trustee than he or she would by servicing new or existing clients. So, at least from a business perspective, the accountant or lawyer may be reluctant to agree. Secondly, if the accountant or lawyer knows the client has complicated family dynamics, he or she may decline on the theory that it is better to stay out of family disagreements and maintain at least a semblance of fair relationship with all members of the family. Finally, the accountant or lawyer may be exposed to increased liability (beyond those expected of his profession) by acting as Trustee (not to mention the fact that the accountant's or lawyer's professional liability insurance may not cover situations where he or she is serving as Trustee).

Despite the foregoing factors, accountants and lawyers do frequently serve as Trustee of their client's trust and often the administration process is carried out efficiently both because of the professional's technical understanding and familiarity with the client and the client's family.

One of the primary objectives of using a revocable living trust is probate avoidance; however, this requires re-titling assets in the name of the trust so that others understand that those assets are to be handled pursuant to the terms of your trust. But what does one do for personal items such as jewelry or furniture? These assets generally have no formal registry or records indicating the ownership of the items. 

For personal items, estate planning lawyers usually apply some form of "General Assignment" that evidences one's intent to transfer his personal items to the trustee of his trust. By doing so, one can provide instructions on how personal property should be distributed directly in the trust document.

By allowing the trust provisions to govern the disposition of personal property, a Trustor can easily modify the distributions by simply creating an amendment to his trust, which neither requires witnesses nor notarization. Alternatively, if one were to dispose of his personal items by Will or a codicil to his Will, the modification would have to follow the formal witnessing procedures associated with creating a valid Will or codicil.

For the most part, personal property tends to be handled fairly informally because the items are generally of very little value and therefore not worth fighting over. Nevertheless, handling personal property through the trust can reduce potential complications for the successor Trustee of your trust in the future.

A pour-over Will is a document used to transfer assets to the trustee of a revocable living trust. The assets which are "poured over" into the revocable living trust are then administered pursuant to the terms of the revocable living trust (along with the assets that were already held by the living trust).

A pour-over Will is deemed valid if:

(a) the trust is identified in the Testator's Will; and

(b) the terms of the trust are provided in:

(i) a written document that was signed (other than the Will) before, during, or within 60 days after the signing of the pour-over Will; or

(ii) the Will of someone else who died before the Testator.

The specific statutory provision related to the validity of a pour-over Will can be found in Probate Code Section 6300, which provides:

(a) A devise, the validity of which is determinable by the law of this state, may be made by a will to the trustee of a trust established or to be established by the testator, by the testator and some other person, or by some other person (including a funded or unfunded life insurance trust, although the settlor has reserved any or all rights of ownership of the insurance contracts) if the trust is identified in the testator’s will and its terms are set forth in a written instrument (other than a will) executed before, concurrently with, or within 60 days after the execution of the testator’s will or in the valid last will of a person who has predeceased the testator (regardless of the existence, size, or character of the trust property). The devise is not invalid because the trust is amendable or revocable, or both, or because the trust was amended after the execution of the will or after the death of the testator.

(b) Unless the testator’s will provides otherwise, the property so devised (1) is not deemed to be held under a testamentary trust of the testator but becomes a part of the trust to which it is given and (2) shall be administered and disposed of in accordance with the provisions of the instrument or will setting forth the terms of the trust, including any amendments thereto made before or after the death of the testator (regardless of whether made before or after the execution of the testator’s will).

(c) Unless otherwise provided in the will, a revocation or termination of the trust before the death of the testator causes the devise to lapse.

Often clients acquire assets after creating a trust and forget that those assets should be re-titled in the name of the trust. The pour-over Will, while it may not avoid probate, can be viewed as a back-up document to ensure that all of the client's assets pass in accordance with the provisions of his living trust.

Private professional fiduciaries are typically individuals who hold themselves out as experts in serving as Trustees of trusts. These individuals may come from a variety of backgrounds, including accounting and law. To be a private professional fiduciary in California, the individual must adhere to the requirement of the Professional Fiduciaries Act as provided in California Business and Professions Code Sections 6500 to 6592. (See also California Probate Code Section 2340). 

Despite licensing requirements, private professional fiduciaries may have different levels of competence and capability, so interviewing and determining a candidate's qualifications is important. 

It's important to also note that private professional fiduciaries may not be expected to provide the full range of services that a corporate trustee would, such as investment advisory. As a result, utilizing a private professional fiduciary may require additional fees for ancillary services. That being said, a private professional fiduciary may be more flexible in terms of dealing with sensitive family dynamics involving beneficiaries as they are typically individuals who are directly dealing with the relevant parties.

You can find a list of licensed private professional fiduciaries on the website of the Professional Fiduciary Association of California (www.pfac-pro.org).