Fill out our Estate Planning Questionnaire and call us toll free at 1-877-963-9543 to schedule a free consultation.
A purpose trust (“PTrust”) is created to advance a purpose of some kind. Charitable trusts are technically a PTrust created to advance a charitable purpose. To ensure there is no confusion, PTrusts are normally referred to as a trust that advances a non-charitable purpose. PTrusts are highly controversial and there are states that do not recognize this type of trust at all. One of the biggest reasons why this type of trust is controversial is because PTrusts normally do not have any identifiable beneficiaries. A PTrust only has a certain purpose, and therefore, there is no one to make sure the trustee is doing his or their job properly. A valid PTrust are the ones that are worded so that the beneficiaries are identifiable. California is a state that does recognize PTrusts under limited circumstances. Under California Probate Code §15204, “a trust created for an indefinite or general purpose is not invalid for that reason if it can be determined with reasonable certainty that a particular use of the trust property comes within that purpose.”
One of the more common PTrusts are trusts that care for animals. Under California Probate Code §15212, trusts created to care for animals are valid if certain requirements are met. The trust would terminate when there are no more animals (that were alive on the date of the settlor’s death) that remain alive. The settlor is the person that created and funded the trust. The assets in the trust to care for the animal are only for the care of the animal.
The trustee (person who is charged with carrying out the terms of the trust) cannot use the assets in the trust for his or her own purposes or for purposes not for the care of the animals. I am sure we have all heard or read the news about some millionaire or billionaire leaving their wealth for someone to take care of their beloved pet upon the death of the pet owner. I admit that there have been moments of jealousy over a pet. To think, some of these beloved pets are more cared for and have access to more money than some people will make in a lifetime.
