A trust is a practical and flexible legal device by which one or more people you select (your “trustees”) manage assets for the benefit of others you name (the “beneficiaries”). The person who creates a trust is commonly called the “grantor.”
You can establish a trust during your lifetime (a “revocable living trust”) or upon your death (a “testamentary trust”). You can make a trust the beneficiary of your will, an insurance policy or retirement plan.
Is a revocable living trust right for you? If you wish to control your property while you are still alive, provide for your loved ones if you are disabled, give your property to whom you want, when you want, all while reducing administration hassles and high legal and administrative fees when you die, the answer is “yes.”
Your other estate planning documents, such as your will, power of attorney and advanced medical directive are very important. However, for people who want to accomplish the objectives listed above, a revocable living trust should be the foundation of their estate plan.
Trusts can serve a variety of purposes
- Tax reduction
- Spreading assets among different beneficiaries
- Managing assets for the convenience of minor or elderly beneficiaries
- Asset protection
Normally the trustee can be you alone, your spouse or another family member, or a corporate trustee (such as a bank trust department). Regardless of who you select, you as grantor can always change the trustee. Because the trust is revoable, you have this flexibility, as well as the ability to add or remove assets from the trust, amend the trust or terminate it completely.
Tune in for a future blog for more benefits of planning with revocable living trusts.
Filed under: Estate Planning
