A revocable living trust is a legal arrangement by which legal title to property is transferred from personal ownership into the legal ownership of the trust. The person creating the trust, typically referred to as the “grantor” must actually change the title of ownership for each asset that will be placed in the trust from his or her name to that of the trust in order for the terms of the trust to govern distribution of these assets. The “trustee” is the person designated by the trust to manage the assets according to the specific terms of the trust document for the benefit of the beneficiaries identified in the trust. The trustee is quite often the same person who has created the trust (i.e., the grantor), a family member, friend, a corporate entity (such as a bank or trust company), or a combination of these. As the trustee, the grantor can maintain full control of the trust until his or her death or incapacity. When the grantor dies or becomes incompetent, legally incapacitated, or resigns, a successor trustee identified in the trust agreement takes over. The successor trustee has legal responsibility for administering the trust prudently and for the beneficiaries.
Assets held in a revocable living trust do not go through probate. The trustee already has legal title to the trust assets and can transfer title, without probate, to the beneficiaries named in the trust agreement. In addition to avoiding the time and expense of probate, the use of a living trust may reduce the risk of a will contest, and provides privacy of your financial affairs at death. Finally, a revocable living trust is also a very efficient way to do tax planning to ensure that you (and your spouse) pass assets in the most tax-efficient manner to your beneficiaries.
There are many other Trusts as well that allow you to pass assets in a tax-efficient and asset-protected manner to your beneficiaries. Our lawyers are pleased to offer legal advice in all aspects of Trusts. We understand that every client’s goal is to ensure that personal and financial affairs are appropriately handled upon death or disability.