The lawyer or other party who actually creates the trust document itself. The grantor, the trustee and the beneficiary (at least the main beneficiary) may be the same person in many cases. The person who creates a trust is the creator of trust. You'll also see the terms trust and grantor.
All three words refer to the same person. Usually, the trust of a revocable living trust is also the trustee. The trustee is the person who is responsible for the administration of a trust, such as keeping a record of income and tax returns. One thing you will do in your trust documents is to name a successor trustee.
This is the person who will manage the trust when you can no longer. The last term you need to know is beneficiaries. These are the individuals, organizations or other entities that will receive assets from your trust after your death. A revocable living trust is a popular estate planning tool that you can use to determine who will receive your property when you die.
Most living trusts are revocable because you can change them as your circumstances or wishes change. Revocable Living Trusts Are Alive Because You Create Them During Your Lifetime. Lawyers sometimes call this inter vivos. A trust can be revocable, which means I can revoke it.
It also means that I can change it. So if I don't like the way I'm doing in life, I'll just change it. That is one of the beauties of this revocable trust. Other trusts are irrevocable, and there are some definite estate planning needs for an irrevocable trust, but we won't talk about that today.
Now my trust can also be established while I am alive and that is why it is called a living trust. Another type of trust is called a testamentary trust, that is the one that was established in my will and again we will save the testamentary trust for another day. The assets in your revocable living trust are considered your property and creditors can claim them. While assets held in an irrevocable trust are generally out of reach for creditors, that is not true with a revocable trust.
So, let's look at this concept of a revocable living trust and find out if it's exact representations and find out if you really need it. Compared to wills, revocable trusts provide greater privacy, as well as more control and flexibility over asset distribution. The income earned by the trust assets goes to you and is taxable, but the assets themselves are not transferred from the trust to your beneficiaries until your death. Revocable living trusts can ensure a smooth transfer of ownership to your beneficiaries and avoid delays.
Contrary to popular belief, revocable living trusts offer very little asset protection if you retain an ownership interest, such as appointing yourself as a trustee. If you appoint yourself a trustee of your trust and appoint another person as your successor trustee, you can ensure that you can control the assets of the trust if you are incapacitated without having to seek approval from a court. This is particularly true if you didn't properly add all of your assets to your trust or if your trust doesn't have enough funds to cover the distribution costs of your assets. After creating a revocable trust, the assets must be re-titled in the trust's name because assets that are not formally held in the trust still have to go through probate and will not be under the management of a successor trustee in the event of disability.
To transfer a bank account to a revocable living trust, it's best to check with your bank about its process. Revocable living trusts are a popular estate planning option because they allow the grantor to make changes to the trust after it is created and even allow the grantor to completely eliminate the trust. A living trust is an easy way to plan the management and distribution of your assets, and you don't need an attorney to do so. With an irrevocable living trust, you cannot modify or terminate the trust without the approval of all persons named in.
While the creator of the trust is alive, the trustee is usually the creator of the trust and then a successor trustee takes over after the death of the trust. .