| The Revocable Living Trust |
What is a revocable living trust? A living trust, also known as a Revocable Living Trust or a Family Trust is a legal document that holds title or ownership to your real property and other assets. When you create a Revocable Living Trust you transfer ownership of your assets to the trust. Transferring assets is called "funding" the trust. When you transfer title of an asset to the trust you don't relinquish control. You can still buy, sell, borrow or transfer just as you would do without the trust. Control The living trust is a written legal document that allows you, as the trustee(s), unlimited access to and full control of your assets during your lifetime. It also enables you to pass property after your death to family, friends and/or loved ones. You will also appoint someone to act as successor trustee to make sure that your property goes to the ones you intend. The Trust For a trust to be effective it has to own title to the property or asset. When the assets are in the name of the trust there is no need for probate since the estate is now controlled by the trustee of the trust. You or you and your spouse can be the primary trustees receiving full control to buy, sell, borrow or transfer in the case of a spouse's death. After both spouses die, the trust identifies the person who will act as successor trustee. The trust gives that person the right to manage all assets on behalf of your wishes made known in the trust document. There are several roles or responsibilities under a trust. The Grantor is the person who sets up the trust. This would be you. The grantor has many names such as the creator, settlor or trustor. As the grantor, you have full control to manage or change the trust at any time. A Revocable Living Trust is a great way to avoid unnecessary taxes, maintain privacy, and provide your heirs with a quiet and efficient way to distribute assets. The Trustee is the person who will manage the assets in the trust. This will typcally be you while you are alive. When a trust is created, the trustees are usually the same individuals as the grantor. For married couples, usually the husband and the wife both act as co-trustees. You do not have to be your own trustee if you do not want to or do not feel you are able to. You can name an adult child or friend or even an third party institution to manage your affairs for you while you are alive. The Successor Trustee is the person who will manage your assets for you when you die or if you should become incapacitated. This person or persons will have the right to manage your affairs without the need for any probate court. The successor trustee will immediately have the same powers that you as grantor/trustee had to buy, sell, borrow, or transfer the assets inside the trust. The successor trustee will have the right to distribute the trust's assets according to your instructions in the trust. This immediate control can allow your estate to be transferred to your children or loved ones right away avoiding the delay of probate. The successor trustee does not have the legal right to change your trust. The trust becomes irrevocable or unchangeable after the death of the grantor(s). However, the successor trustee does have the right to manage the assets in the estate, but must do so for the benefit of the beneficiaries. The Beneficiaries are the people who will receive the benefit of the trust's assets. Typically the estate will go to the surviving spouse. If there is no surviving spouse, assets will pass to the people you named in your trust. You can name your children, relatives, friends, or a charitable organization to be your beneficiary. Continue |
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