Frequently Asked Questions
What is a Revocable Living Trust?
A Living Trust is a legal document used to plan and
organize your estate. A Living Trust is created when you transfer your property from your individual name to the name of your Trust. You simply re-title your assets. For example, the deed to your house would be changed
from Joe and Mary Smith to Smith Family Revocable Trust. Control remains with you. Only you can sell the house. By creating a Living Trust, you may save your loved ones thousands of dollars in legal and
other fees, as well as unnecessary delays that can continue for months or even years. In addition, you can alleviate many emotional strains caused by your death and the settling of your estate.
What does "Revocable" mean?
A Living Trust can be either revocable or irrevocable.
"Revocable" means you can change the Trust or terminate it at any time while you are living. "Irrevocable" means you can never change or cancel the Trust.
What does "Living" mean?
"Living" means you created the Trust while you were
living. A Testamentary Trust, effective after death, must go through probate.
Why would I want a Living Trust?
The main reason to have a Living Trust is to avoid probate."
What is probate and why do I want to avoid it?
Probate is a process whereby a deceased person's
estate is placed into the court system. The court makes sure that debts are paid and property is distributed according to the Will, or in the absence of a Will, in accordance with state law. People want to avoid probate
because it is so costly, lengthy and public. A Living Trust avoids probate and is less expensive, quicker and private. The Living Trust completely eliminates the court process.
Can a Living Trust save estate taxes?
Yes. For married couples with estates over the
current estate tax credit amount, an A-B Trust will allow you to pass the tax allowed limit tax free to your beneficiaries. This can result in significant saving in estate taxes.
Who are the parties to the Living Trust?
- The TRUSTOR(S)
The person(s) who places the assets into the Trust, the person who created the Trust—You!
- The TRUSTEE(S)
A person(s) who controls the assets of the Trust, the person who manages the trust—You!
- The BENEFICIARIES
You are the beneficiary during your lifetime. Upon your death, your designated heirs are the beneficiaries (usually your children).
- The SUCCESSOR TRUSTEE(S)
A person(s) selected by you (in whom you trust and place confidence) who, upon your demise, distributes the assets of the Trust to your beneficiaries according to your specific
instructions (Usually your eldest or most competent child).
Is the Living Trust something new?
No. Trusts have existed for hundreds of years.
Is a Will required if I have a Trust?
The testamentary document, also known as the "Pour Over
Will," specifies that, upon your death, any assets subject to probate are to pour over into your Living Trust.
How is the Trust funded?
The Trust is funded by changing title of your assets from
you as an individual to you as the Trustee of your living trust. Funding is an important part of the Living Trust process. It is imperative that all assets be transferred to the trust.
Who prepares my Revocable Living Trust?
A Trust Counselor obtains the necessary
information from you. Our estate planning attorney discusses the legal aspects and prepares the Trust document. Our professional personnel (financial advisor and paralegal) assist you in the proper funding and signing
of your Trust documents and also provide detailed instructions for family members.
This web site is not to be construed as legal or tax advice. You should consult an attorney or accountant for such advice.