Is There a Limit to How Long a Trust Fund Can Be Maintained?

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When you set up a trust fund, it’s not really meant to last forever. Most trusts have a goal and should be dissolved once that goal is accomplished. However, some trusts do need to stay active for longer. If you think that your trust may need to last a long time, it’s wise to ask a Woodland Hills trust attorney about the relevant laws and whether they might interfere with your plans to provide for a beneficiary.

Is There a Rule About How Long a Trust Fund Can Last?

There are limits on how long trust funds can last. In most cases, they are not supposed to be around for more than 21 years. Once most trusts reach that point, it can mean tax complications and a lot of paperwork. This can be a significant hassle for a trustee, so many trusts are dissolved at this point.

How Long Can a Trust Fund Last in California?

California has an additional rule about trusts. In some cases, they can be allowed to terminate within 90 years of being established. This would allow people to leave assets behind for their children, grandchildren, and even great-grandchildren. The state doesn’t think there was an intent for the trust to provide for relatives beyond that point.

Should Every Trust Fund Stay Active For Years and Years?

It can seem like regulatory overreach to limit how long a trust fund can stick around, but most people are not going to have an issue with it. Most trusts are not supposed to stay active for years and years. Many are supposed to be dissolved quickly, after their purpose has been served.

A great example of this is a testamentary trust. This is a trust you can establish to pass down assets after you pass away. Ideally, a trustee fulfills your wishes and gets each beneficiary their inheritance and the trust can dissolve within a year or two.

If you do need a trust that lasts a long time, there are specific kinds of arrangements that can work for you. A special needs trust can be used to provide for a loved one with medical or developmental issues long after you are gone. A charitable trust can continue to support causes that you championed in life. Even a spendthrift trust can be designed to last a long time so that an heir who isn’t the best at managing money cannot blow through their entire inheritance.

Schedule Your Consultation

If you want to learn more about your estate planning options and how you can benefit from the use of trusts, contact the Law Offices of Yacoba Ann Feldman. We can schedule a consultation and tell you more about what our attorneys can do to help you protect your assets and leave as much as possible to your heirs.

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