A trust produced while someone is still living is called a Living Trust. The Living Trust is produced when one individual, a Grantor, areas property into the trust. You (the Grantor) can be the Trustee and Beneficiary of your own Dwelling Trust, and retain management control over your own property.
Probate court means loss in privacy, delay, and additional expenses. A Revocable Living Trust should assist you to avoid many of the expenses and delay of Probate Courtroom. Your beneficiaries will generally have unrestricted and uninterrupted access to income and assets after your departure provided that you may not have substantial unresolved debts. Note also that Probate Court is a public record with a consequent loss in privacy. In addition a Revocable Living Trust can be put in place to smoothly manage your matters just in case of temporary incapacity.
What are the disadvantages of a Revocable Living Trust?
A Living Trust can be more difficulty to put in place and maintain or modify. Title to all property must be separately transferred to the trust including accounts, acreage and securities. You will likely still need a simple Last Will to dole out any remaining properties or cash not included in your Living Trust.
How can a Revocable Living Trust function?
When a trust is created, a Trustee must be appointed to manage the trust. With a Revocable Living Trust, you (the Grantor) are almost always the Trustee together with the initial Beneficiary so long as you might be alive. When you (the Grantor/Trustee) expire, then the duties and obligations of managing the trust change to the Successor Trustee. At the time of your departure the trust is no longer revocable and the conditions of the trust cannot be changed.
If I set up a Living Trust can I be my own trustee?
Yes. The truth is it is really common for a grantor to behave as their own trustee. One of the advantages of a Living Trust is that the grantor can retain control over their own home for the remainder in their lives. After you expire a Successor Trustee that will take over administration of your Living Trust must be however designated by you.
So easily create a Living Trust then I don’t have to worry about probate?
Not accurate. Any property which you don’t transfer to your own trust will be subject to probate. You must ensure that you might have transferred as much home as possible into your Living Trust including bank accounts, expense accounts, real estate, and company interests. Then probate may also be advisable to restrict creditor rights, and restrict the time your Revocable Living Trust can be challenged if you’ve got large debts and duties. Probate might also be required to establish homestead status to your primary residence.
Is there other means to prevent probate?
There are other ways to avoid the expense and delay of probate. By keeping property collectively (with rights of survivorship) with your spouse or partner the surviving spouse or companion simply presumes full title to joint property in your departure. Furthermore, in the case of life insurance and pension plans, assets may be straight transferred without probate by naming specific beneficiaries in the coverage. You may even avoid probate by just making a present of home before your death. However, you can not do this for the intent of concealing assets or averting debts as a court may find this to be a fraudulent conveyance and may possibly rescind or void the gift.
Will beneficiaries have instant access to my assets and house after my departure?
No. The trustee should first ensure that all legally enforceable debts and obligations of the grantor are resolved. Just then can the trustees make one last distribution of house and the trust assets.