What is a living trust?
A revocable living trust, also known as an revocable inter-vivos trust, is a legal document that allows you to direct how you want your assets to be distributed when you die while allowing you to maintain control of those assets during your lifetime. When a living trust is combined with a comprehensive estate plan, some of the benefits it can provide are the care of disabled and handicapped children (special needs trust), the prevention of taxation of life insurance proceeds (irrevocable life insurance trust), the private administration of a deceased person’s estate after death, the nomination of a successor by the deceased person to manage estate assets in the event the deceased person becomes incapacitated, the benefit of directing how estate assets are to be distributed at death and to whom, the benefit of allowing married couples to take full advantage of their lifetime exemptions to reduce or eliminate Estate Taxes, the option to pass property with limitations established by the d
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, the 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. Within a Living Trust you must provide the name of a Successor Trustee who will take over the management of the Trust if you die or become incapacitated. You don’t have to go through the court to appoint a successor trustee. After your death, your Successor Trustee either terminates the Trust and distributes the assets to the beneficiaries you named in the Trust, or he/she continues to maintain the Trust on behalf of your beneficiarie
In short, a living trust (or sometimes called a “Revocable Living Trust”) is a legal fiction – the purpose of which is to bypass the probate process. Essentially, you create this legal instrument during your lifetime, place your assets into your living trust (a process called “funding the trust”), and manage the trust during your lifetime. After your death, the Successor Trustee steps in, manages your estate, pays off debts, and ultimately distributes your assets to your children or other beneficiaries.
A living trust (also know as a revocable or inter vivos trust) is simply a legal document whereby the trustee of your estate (usually you during your lifetime, or if you are married, you and your spouse) manages and controls your assets. Because title to your assets is conveyed to the trustee of your trust during your lifetime, you avoid probate. As trustee of your trust, you maintain full control over your property. Nothing changes except the way you hold title. You remain the lifetime beneficiary of your trust assets. When you die, your successor trustee will step in, much as an executor of your will would, transferring your assets to your remainder beneficiaries according to your specific instructions in the trust. Additionally, if you become incapacitated, your successor trustee will manage your trust assets on your behalf and for your benefit, avoiding time-consuming and costly conservatorship proceedings (living probate).
A living trust is a contract that allows you to transfer ownership of your property from your individual name to your name as trustee of your trust, so that all of your assets are “owned” by the trust. A revocable living trust is completely amendable, and as the creator and trustee of the trust, you have absolute control of the property in the trust during your life and capacity. Nothing changes except the name on the title to your property.
