There are many different types of trusts, but the most popular type is called a “Living Trust”. Essentially, a living trust performs the same function as a will, with the important difference that property left by a will often must go through the probate court process. You can avoid the probate process with a Living Trust. If you own any Real Estate, the Living Trust is essential in my opinion because this type of property is generally always subject to probate unless the property has been transferred to a Living Trust or some other probate avoidance mechanism is used.
There really is no downside in establishing a Living Trust, and for most people, it is a no-brainer. The type of trust we’re talking about here may go my several names; it might be called a Living Trust, a Revocable Living Trust, or some similar name. In legal terms, this type of trust is known as an “Inter Vivos” trust (which means “among the living” in Latin) because they are created while you are alive. These types of trusts are generally always “revocable” because you can revoke or change it before you die allowing you the maximum flexibility in controlling your property. Therefore, the great thing about the Living Trust is that you are not really locked into anything.
The three major actors in a Living Trust are:
- The Settlors (the people who establish the Living Trust)
- The Trustees (the people who manage the Living Trust and its property)
- And finally, the Beneficiaries (the people who inherit the property in the Living Trust).
The unique aspect about a Living Trust is that you (or you and your spouse), are essentially all three actors. You (or you and your spouse) are the Settlors, the initial Trustees, and also the Beneficiaries of all your property while you are alive.
There is a final actor in the Living Trust we call the Successor Trustee which is sort of like an “Executor” who takes over after the Settlors die. Everybody has heard the term “Executor” and has a basic understanding of what they do but Executor is technically a term used when dealing with a will so the term Successor Trustee is the correct legal term when dealing with a Living Trust. This Successor Trustee will basically distribute the property controlled by the Living Trust and performs any other duties required by the trust.
What’s the next step?
The next step is easy! Call my office today for a free consultation and we will discuss your estate planning needs.