What is a living trust?
It is a legal document that allows you to give what you have to whom you want, when you want and in the way you want. The trust can be changed or revoked according to your wishes while you are alive. The trust avoids probate and can reduce or eliminate estate taxes provided that it is personalized to your needs, properly planned and properly drafted.
A living trust is a legal document that establishes a fund to manage your assets. Most Living Trusts are revocable, which means that at any time before your death, you can revoke or cancel the trust. You can also make changes or amendments to the trust. However, at your death, the trust becomes irrevocable and can no longer be revoked or modified. The trust document identifies the following people: • the person establishing the trust (the grantor or settlor), you (and if applicable, your spouse) as trustee(s) or managers of the trust property, • the successor trustee (who takes over when you die), and • the beneficiaries (who gets the assets in the trust). If you are the trustee of your revocable trust, you do not need to maintain separate records or file separate income tax returns for your trust. Trust property is included on the tax return that you file under your social security or taxpayer I.D. number.
A trust is a legal arrangement that involves a trustor (the person who creates the trust) who names a trustee to: (i) hold legal title to property assigned to the trustee by the trustor, and (ii) administer the property pursuant to the terms and conditions of a trust agreement. Usually the initial trustee(s) of a living trust are its creator or creators. The term “living trust” (sometimes also called “intervivos trust”) refers to a trust that the trustor creates during the trustor’s lifetime. Some trusts are “testamentary trusts,” which is the name given to trusts that are created in a Will and that become effective only after the death of the trustor. A trust can be revocable or irrevocable. A revocable trust is a trust that the trustor can amend or terminate. An irrevocable trust is a trust that cannot be amended by the trustor. The terms and conditions of a trust should be set forth in a written trust agreement. The trust agreement provides how the trustee is manage the trust proper
The Living Trust is a valuable tool designed to keep you and your family out of probate court. It is a legal document which allows for the continued management of a persons assets during their lifetime (usually by the person who sets up the trust), continued management should incapacity occur and the orderly distribution to beneficiaries upon death without the delays and expenses usually associated with probate court and a regular will. A properly drafted Living Trust will often consist of 30 to 55 pages of legal provisions.
