What is a Living Trust?
Keeping Control With a Revocable Living Trust
Click here for a full presentation of ‘Understanding Estate Planning & Living Trusts’.
It is being used more and more by people of all ages, marital status and wealth — instead of a will and the other plans.
Living Trust vs. Will
Let’s first compare a revocable living trust and a will.
Both are legal documents that have been around for hundreds of years.
In both, you name someone to handle your affairs after you die. In a will, this person is called an executor or an administrator. In a living trust, this person is called a trustee.
And in both, you name whom you want to receive your assets after you die.
But, unlike a will, a living trust avoids probate when you die, can control all of your assets and prevents the court from controlling your assets at incapacity. (This process is sometimes referred to as a “living probate.”)
When you set up a living trust, you transfer assets from your name to the name of your trust. For example, from “Bob and Sue Smith, husband and wife” to “Bob and Sue Smith, trustees of the Smith Family Trust.”
This is called “funding” your living trust.
Property Titled in Living Trusts Avoids Probate
When you change the titles of your assets from your name to your trust, YOU no longer own anything. So, when you die, or if you become incapacitated, there is nothing for the courts to control.
The concept is very simple, but this is what keeps you and your family out of probate.
You Keep Control of Your Assets
You still have full control of the assets in your trust. As trustee of your trust, you can do anything with your assets that you could do before you put them in your trust.
You can buy and sell assets, change your trust or even cancel it — that’s why it’s called a REVOCABLE living trust.
You even file the same tax returns. NOTHING CHANGES — except the names on the titles.
Plus, your trust contains your written instructions for what you want to happen to your assets if you become incapacitated and when you die.
In fact, you’ll actually have MORE control with your assets in a living trust than you do now.