What is a revocable living trust? It's a contractual agreement regarding three parties: the creator (Grantor), person responsible for managing the trust (Trustee) and beneficial owner of the trust’s assets (Beneficiary).
What is the difference between a trust and a will?
A will must be submitted to the probate court before it can go into effect; it does not protect you if you become physically or mentally incapacitated. A trust, however, does not go to probate after death so the courts do not control your assets.
How does a living trust avoid probate?
With a living trust, you transfer assets from your name to that of your trust, which you control as trustee; technically, this means you no longer own what you transfer to the trust, but also means the courts control nothing when you die or if you become incapacitated.
How does a living trust work?
As the creator of a living trust, you are its "grantor"; if you're married, you and your spouse can be co-grantors of one trust or you can be grantors of separate trusts. You must name yourself, spouse or other individual as trustee to "manage" your trust assets but, even if someone else is an agent, you still control the trust as long as you're competent.
Why would I consider a corporate trustee?
You may wish to name a corporate trustee (such as RCB Bank) to manage your trust. Perhaps you don't want the hassle of managing your assets or have children and don't want to cause family disharmony–corporate trustees are in the business of managing trusts. They are government-regulated and are required by law to follow the instructions in your trust.
What is involved in setting up a living trust?
You make the basic planning decisions: take inventory of your assets then select your trustee, successor trustee and beneficiaries. Your attorney will assist you in planning your decisions and will then prepare the legal document for you. You should fund the trust while you're able, as a living trust only controls the assets transferred into it.
Should I have an attorney prepare my trust?
Yes, preferably one who specializes in trusts. An experienced attorney can provide valuable guidance and will ensure everything is done properly.
How long does it take to get a trust?
After making the basic decisions, it should take only a few weeks to prepare the documents. You'll then need to change the titles and beneficiary designations on all assets placed in the trust.
Who should have a trust?
Anyone can benefit from a trust. Age, marital status and wealth really don't matter. If you own titled assets and want your loved ones to avoid interference at your incapacity or death, you should consider a trust. The trust document is confidential, cannot be contested and is not public record.