What is a Revocable Living Trust?
This is an agreement with three parties: the Trustmakers, the Trust Managers, and the Trust Beneficiaries. For example, a husband and wife may name themselves all three parties to create their trust, manage all the assets transferred to the trust, and have full use and enjoyment of all the trust assets as beneficiaries. Further “back-up” managers can step in under the terms of the trust to manage the assets should the couple become incapacitated or die. Special provisions in the trust also control the management and distribution of assets to heirs in the event of the trustmaker’s death. With proper planning, the couple also can avoid or eliminate death taxes on their estate. The Revocable Living Trust may allow them to accomplish all this outside of any court proceeding.
It is a legal entity that you create by a declaration of trust, that is separate from yourself and continues in existence after you die. You put your property into the Trust and have control over it during your lifetime, because you are the Trustee. After you die, an aspirate individual designated by you in the Trust document takes control of the property and distributes it according to the directions you provided in the Trust document.
Revocable Living Trust is the most important and versatile Estate Planning document available under the law. It is created while you are alive and can be amended or revoked at any time. A Revocable Living Trust is an instrument used to direct assets from one person to another under the management of a third person. The Revocable Living Trust enables an individual to completely avoid Probate, its costs, delays, and publicity. A Revocable Living Trust begins the moment you (the settler) execute the declaration of Trust. The Trust becomes effective when it is funded properly, transfer of property into the Trust.
A trust is a contract between its maker and a trustee. In the contract, the trust maker gives instructions to the trustee concerning the holding and administering of trust assets. These instructions specify how the assets are to be held and distributed during the maker’s good health, upon his or her disability, and ultimately upon his or her death. With a revocable living trust,a person can be (and usually is) both the maker and the trustee. A husband and wife will often be joint trust makers and joint trustees of a joint trust. The term “revocable” refers to a set of powers that are typically listed in the trust agreement which specify that the trust maker has the power to amend or revoke the trust. Upon revocation, the trustee is directed to return all trust assets to the trust maker. In addition to having the power to amend or revoke, the maker has the power to place assets into the trust, remove assets from the trust, make all investment decisions concerning trust assets, and contr
A Revocable Living Trust is a legal document that is created by an individual, called a Trustmaker, to hold and own the Trustmaker’s assets, which are in turn invested and spent for the benefit of the Trustmaker as the Beneficiary by a Trustee. In most cases, the Trustmaker will also be the Trustee, although some wealthy individuals may choose to have an institution manage their trust property. A Revocable Living Trust covers three phases of the Trustmaker’s life: while the Trustmaker is alive and well, if the Trustmaker becomes mentally incapacitated, and after the Trustmaker dies. Phase One of a Revocable Living Trust: The Trustmaker is Alive and Well While the Trustmaker is alive and well, the trust agreement will have specific provisions allowing the Trustmaker to manage, invest, and spend the trust assets for his or her own benefit. Thus, the Trustmaker will go about business as usual with regard to assets that have been funded into the trust, except that the Trustmaker will sign
