Revocable Living Trusts
A living trust is a written document that you create during your lifetime. You may choose to fund it during your lifetime, or leave it unfunded until your death.
"Funding" means that you actually make the trust the legal owner of your assets. For example, you might choose to retitle your bank accounts, brokerage accounts, or even your house into the name of your trust.
Your trust will contain provisions for management of the transferred assets during your lifetime and will include, as well, what happens to those assets upon your death. After your death, it functions as a Will substitute. The trustee will administer the trust in accordance with its terms. Most often you, if you so choose, will be the trustee, although you can name a spouse, child or bank as a co-trustee.
A living trust is revocable, meaning that you can end it at any time. You, as the creator of the trust, reserve the right to amend it and alter the trust however you please and you can obtain access to all the assets at any time for any reason.
Because you control everything in your trust, the trust does not protect assets from any creditor or nursing home.
A living trust accomplishes three goals:
1. Avoids probate. Those assets that you have transferred to the trust prior to your death will avoid the probate process. Upon your death, the successor trustee will do with the assets whatever the trust says.
The bottom line: Upon your death, the trust serves as a Will to the extent that it has assets in it.
2. Privacy. Unlike a Will, which is a public document that must be filed with the Probate Court at death, a living trust is private and is not available for inspection by the public at your death.
3. Protection if you become incapacitated. The living trust will ensure that your assets are managed for your benefit in the event that you become incapacitated. Should you become either physically or mentally disabled, if your assets are in a living trust, your successor trustee will continue to manage the trust and its assets in accordance with the terms that you established. There is no need to seek a conservator in the Probate Court
What's the difference between a Will and a Trust? Click here...