LIVING
TRUST
Quick Overview of
Living Trust Law?
Why Should I have a Living
Trust?
How the Living Trust Works.
It's your Choice.
QUICK OVERVIEW
The Living Trust, as it is commonly called
is, in fact, an Inter Vivos Trust which
means the trust will exist only during
the lifetime of the Trust Maker (Trustor).
There is an exception to this lifetime
provision when the trust is continued
after the death of the Trustor for the
benefit of one or more beneficiaries (heirs)
by reason of age or other conditions.
There are two types of Living Trust, "Revocable"
and "Irrevocable." A Revocable
Living Trust is one that can be revoked
at any time by the Trustor. The Irrevocable
Living Trust is one that cannot be revoked
without written consent of the beneficiaries.
Even though the title to the trust property
is in the name of the Trustee (usually
the Trustor), no authority or power to
control the property is lost since any
action the Trustor could engage in as
the sole owner of the property is readily
available to her/her as the Trustee under
the Terms of the Trust. In other words,
a Living Trust is a vehicle that can be
legally operated or legally aborted at
the will of the Trustor or Trustors, while
fully preserving an estate that will pass
to his or her heirs without the necessity
of a cumbersome and costly probate.
WHY SHOULD I HAVE A
LIVING TRUST?
There are several reasons why a Living
Trust is essential to good estate planning.
However, the single most important reason
why someone should have a Living Trust
is to avoid probate! A Living Trust eliminates
the need for your heirs or surviving spouse
to be subjected to the agony and unnecessary
cost of probate. A Living Trust further
provides the entity to ensure that you
either pay no estate and inheritance taxes
or at least minimize those onerous taxes.
In addition, a Living Trust establishes
the means to provide for your needs in
the event that you become incompetent.
It can provide for the support and education
of your minor children. It can further
provide care for a handicapped child without
jeopardizing his or her governmental benefits.
A Living Trust can also insure what all
people want-privacy of their financial
affairs. When a will is probated, it is
filed with the court. All court filings
are considered public record which allows
anyone to go to the court and view them.
Since a Living Trust is not probated it
never becomes a public record. Hence,
no one can view the Trust without the
Trustees permission.
HOW THE LIVING TRUST
WORKS
A Living Trust means that you do not hold
title to anything; since your assets are
inside the Trust, the Trust holds title
to everything. However, even though you
have relinquished ownership of your assets,
you still retain control of those same
assets. As Trustee of your Trust, you
continue to have the same power to buy,
sell, transfer, borrow, and do whatever
you wish with "your" assets.
Your control of those assets is no different
on the day after you put them into the
Trust than on the day before you put them
into the Trust. While you remain in control
of those assets, remember, the Trust now
owns them. The significance of your not
"owning" anything becomes very
important when you ultimately die. Upon
your death, since you have nothing in
title in your own name (because your assets
are in the Trust), there is nothing to
probate. If you are married, the surviving
spouse typically becomes the surviving
trustee and, as such, continues to have
the same power to by, sell, transfer,
or do whatever is desired with those assets.
Normally, in the Trust you would identify
whom you want to act as the Successor
Trustee. The Successor Trustee is the
person who will take charge of the Trust
upon the death of the original Trustee(s).
That person, or persons, will immediately
step in, upon the death of the surviving
Trustee, and have the same power to buy,
sell, or transfer those assets and, more
importantly, to use them and to distribute
them as you would have wanted them used
or distributed. Once the Successor Trustee
takes over the Trust he/she or they or
limited in what the can do only by what
is enumerated in the Trust. They must
distribute the assets exactly as the Trust
directs them to. If the Trust is to continue
it's existence in the case of a minor
child or children, the Trustee must manage
the Trust until the assets are completely
distributed to the minor child or children.
When this happens is entirely up to the
original Trustor. The Trustor can set
any age of the child for the Trust to
end.
IT'S YOUR CHOICE
Now that you are somewhat familiar with
what a Living Trust is and how it works
you now have a choice to make. You can
either do nothing or you can have a Living
Trust prepared specially for you and all
necessary documents. Think for a moment
about what you would leave behind if suddenly
something happened to you tomorrow. Would
things be simple for your family or heirs
or would a myriad of problems arise for
them? The choice is yours. Call for a
free consultation. (858) 277-0232.
Call now for a free consultation. (858)
277-0232.
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