The following definitions are important to know so that you can accurately determine how to fund your TOLI, as well as select an appropriate trustee for your TOLI.
Separate Property – is any property that is not considered Community Property, and typically includes all of the following:
- all property owned by someone before marriage;
- all property acquired (after marriage) by gift, bequest (legacy; inheritance), devise (left by will), or descent (inheritance with no will); and
- the rents, issues, and profits of the property described in this section.
Community Property – except as otherwise provided by statute, all property, real or personal, wherever situated, or acquired by a married person during the marriage while residing in California is community property. Legally speaking, there is also a presumption that any property (personal or real) acquired during marriage is community property. Moreover, commingling (or mixing together) separate property funds can change (or transmute) the property to community property, unless there is some sort of agreement in place to give notice to your spouse that you do not intend to make a gift, and are able to trace the funds to your separate property.
Settlor/Grantor – is the person that creates the trust, and is also the person who donates the funds to the trust.
Insured – is the person insured under an insurance policy, and is also typically the person who wants to create an irrevocable life insurance trust (or trust owned life insurance).
Decedent – is the person that died.
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