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REVOCABLE LIVING TRUSTS
What is a Revocable Living Trust?
A Trust is a legal relationship in which assets are transferred to a Trustee to be used for the benefit of one or more beneficiaries. The person who establishes the Trust is called the Settlor. Upon accepting the assets as Trustee, the Trustee undertakes the obligation to use the assets in accordance with the Settlor’s directions. Generally, these directions are set forth in writing along with the other terms of the Trust.
A Living Trust is the name given to Trusts created during the Settlor’s lifetime and is usually created for the Settlor’s benefit during his or her life. After the Settlor’s death, the Trust assets are distributed to or managed for the benefit of family members or other designated beneficiaries. A Revocable Living Trust can be amended by the Settlor at any time during his or her lifetime and can also be revoked if the Settlor changes his or her mind. The Revocable Living Trust usually becomes irrevocable upon the Settlor’s death and the terms of the Trust cannot be modified except by court order.
Can I Serve as Trustee of my Revocable Living Trust?
“Karen, we really, really appreciate you! The better the planning we do, the luckier we have been, which is why I brought Aunt Betty to you 14 years ago, and we have sought your advice throughout. She is at peace knowing she doesn't need to worry about managing estate-related choices in her final days.“
“Thanks for taking such good care of us and making it easy to ask questions. I appreciate not being made to feel stupid for asking questions. It was a lovely gift at a tough time.“
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What are the Advantages of a Revocable Living Trust?
Even more costly and time-consuming than probate proceedings for decedents are guardianship and conservator proceedings for people who have become incapacitated. Through a Revocable Living Trust, you select a Successor Trustee to manage your affairs should you become incapacitated, thereby avoiding court proceedings and the court-supervised management of your assets and affairs.
Estate Tax Savings
Management of Assets for Children or Grandchildren
How do I choose a Successor Trustee?
Here are some factors to consider in choosing the right person to administer your Trust after your death and, remember, you should always name back-ups in case your named Successor Trustee is unable to serve:
- Is your chosen Successor Trustee organized and good with managing assets?
- Would your Successor Trustee be fair to the beneficiaries and communicate well with them?
- Is the Successor Trustee local, or if not, how difficult would it be to administer the Trust if there is real estate to be sold and personal property in the home to be distributed?
- Does your Successor Trustee know your child’s needs and your goals regarding education and activities?
- Is your Successor Trustee honest and secure in their own finances, i.e. will they use your child’s funds only for your child’s interests and not for their own?
- Do you wish to name Co-Trustees to act together or one person alone?
How do I place assets in a Revocable Living Trust?
Checklist for Funding your Trust.