What is a living trust?
• A Trust is a contract where one person transfers property to another person for the benefit of a third person. For example, X transfers property to Y, to manager for the benefit of Z. If the creator of this arrangement sets it up during his or her lifetime, it is called a “Living Trust.” • If the creator retains the right to dissolve this trust, is a “Revocable Living Trust” otherwise it is an “Irrevocable Living Trust” which is the preferred vehicle for long term planning, reduction of taxation and liability. WebTrust documents are “Irrevocable”. • A Living Trust avoids Probate. This is the most advertised advantage of a living trust and therefore represents a great savings. • Property in the trust avoids publicity. Estates which pass through probate such as a will are public record. Anybody who wants to can see it. Property in the trust that avoids publicity achieves privacy both as to its contents and to whom receives it.
The Living Trust is a written instrument created to allow a person to control the fate of his or her state. The Chief reason for creating a Living Trust is to avoid the frustration and the high cost of probate. The Living trust is also create to manage property pf the owner during his or her lifetime and after the owner’s death.
It is a written document that creates an entity to which a person transfers ownership of their assets. The legal document contains the transferee’s instructions for managing their assets during their lifetime and for their distribution upon their incapacity or death. A living trust avoids probate at death and court-appointed conservatorships in the event of incapacity. A living trust is also referred to as a revocable inter vivos trust, meaning a trust created during one’s lifetime.
A Living Trust is an effective way to provide lifetime and after-death property management and estate planning. When you set up a Living Trust, you are the Grantor; anyone you name within the Trust who will benefit from the assets in the Trust is a beneficiary. In addition to being the Grantor, you can also serve as your own Trustee (Original Trustee). As the Original Trustee, you can transfer legal ownership of your property to the Trust. While this can save your estate from estate taxes when you die, it does not alleviate your income tax obligations.
A living trust is a legal document that, just like a will, contains your instructions for what you want to happen to your assets when you die. Living Trusts are not new they’ve been used successfully for hundreds of years. But, unlike a will, a living trust avoids probate at death, can control all of your assets, and prevents the court from controlling your assets at incapacity.
