What is a Living Trust?
A living trust, sometimes called a “revocable” trust, is a contract. One of the benefits of the revocable trust is the private administration of your estate.
Many people are surprised to learn that a Will does not avoid probate. During the probate, the court will likely uphold your intentions as expressed in your will but the process of transferring your assets will be through the court guided process.
There are three parties to a Trust. The creator of the trust is the “Trustor”, there is a manager of the trust/assets which is the “Trustee” and the third party is the one who gets the benefits of the Trust, this is the “beneficiary.” When someone establishes a Trust, they are generally all three parties.
The Trust is great because not only will it express your intentions as to where your assets go after you pass away but it will also name someone to set in and manage your trust assets during any period of incapacity. The individual you name to act during incapacity is called a “Disability Trustee.”
The Disability Trustee is responsible for handling the trust assets for your benefit and only your benefit during that period of incapacity. Without the Trust, the court, through a conservatorship, would get involved during that period of incapacity.
After the Trust has been executed, the next most important step is the funding of the Trust. The “Funding” of the Trust is just as important as the execution of the Trust. Funding is the process of transfers the individually owned assets into the Trust. If an asset is not transferred to the Trust, your Trustee lacks the legal authority to manage the asset. The Trustee only has control over the assets transferred to the Trust. So yes, you have “homework” after the Trust is executed.
Trackback from your site.
Shauna R. Anderson is a State Bar Certified Legal Specialist in Estate Planning, Probate and Trust Law, a designation earned by fewer than 100 of the 15,000 licensed attorneys in the County. Shauna is experienced in living trusts, generational wealth planning, trust administration and asset protection. Shauna has personally helped over 3,00 families establish estate plans.