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What is a living
trust?
What is a revocable living trust?
A trust is an “entity that holds assets for the benefit of certain persons.”
Living trust means legally “an inter vivos (among the living) trust that is
established and funded during the settlor’s (creator’s) life.” Revocable
means legally “able to be terminated or changed at the settler/creator’s
discretion.”
Thus, if you establish a revocable living trust, you are usually the trustee
or co-trustee (with another family member, if desired) during your life,
with a designated successor trustee(s) to take over the trust management
during your serious disability or at your death. You are the beneficiary
while you are alive. The trust agreement specifies who the successor
beneficiaries are---and when and in what amounts they are to receive trust
income and assets after your death.
Why You Should Use a Revocable Living
Trust To
Own the Title to Your Assets During Your Life
When you leave a will to do carry out your estate administration of
assets held in your name at your death, all you are doing is leaving a
forwarding address of where to send what’s left of your estate after it has
been substantially diminished by federal estate taxes, state inheritance
taxes, probate administration and court fees, and probate lawyers’ fees.
If you love your family more than attorneys and the local probate court,
don’t use a will as your primary estate planning tool. Instead, use a
revocable living trust that is trusteed by you during your life, but which
becomes irrevocable at your death. After your living trust has been created
by a trust specialist attorney, you transfer the ownership of all of your
estates into trust ownership so that when you die, you die with nothing in
your name to be processed through expensive, time-consuming, and
bureaucratic probate court process.
In addition to achieving the above objectives, the administration of your
estate through a trust is private and confidential---quite a contrast to the
public process of probate that makes your family’s assets very much known to
any con man or con woman who wants to fleece your heirs of their
newly-inherited wealth---what ever is left over after the probate process.
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