A living trust as an estate planning tool that is the ideal choice for a wide range of people. Unfortunately, many individuals harbor some misconceptions about trusts, and one of them is the notion that you lose all control of assets that you convey into any type of trust.
In reality, this is not the case at all, because there are two different classes of trusts. It is true that there are irrevocable trust that cannot be dissolved, and generally speaking, the terms cannot be changed although there are some exceptions. These trusts are used to accomplish certain objectives that most individuals do not have to address.
The living trust that is widely utilized is revocable, so you would have the ability to revoke or rescind the trust at any time and take back direct personal possession of the assets.
However, there would be little motivation to do so, because you would be able to act as the trustee and the beneficiary while you are alive and well. Come as a result, you would have absolute control. You could change the terms remove assets, and convey assets into the trust as you see fit.
Since you are using the trust as an estate planning device, you would address the events that will take place after you pass away when you establish the trust. This would involve naming beneficiaries that would succeed you along with a successor trustee to act as the trust administrator.
With regard to the trustee, it can be any adult that is willing to assume the role, but there could be considerable time demands and some personal risk involved. Potential conflicts of interest can enter the picture as well depending on the dynamic. You could choose to go in a different direction and utilize a corporate trustee such as a trust company or the trust section of a bank.
Postmortem Termination
When you establish the trust declaration, you control when the trust will terminate after you pass away. There are many different possibilities, and a lot of people will simply instruct the trustee to liquidate all of the assets and distribute them in a certain way right after you are gone. Once the tasks have been completed, the trust would no longer exist.
You can alternately instruct the trustee to distribute assets on an incremental basis over an extended period of time. This is something that people often do when they have concerns about the money management capabilities of the beneficiary, or multiple beneficiaries.
It would be possible to instruct the trustee to distribute the entire remainder when the beneficiary’s reach some age threshold, and that would be the termination date. This are just a couple of the ways that a living trust can terminate, but in a real sense, it’s up to you.
We should point out the fact it is possible for a married couple to create a joint living trust. Once again, there are multiple ways that this type of trucks can be structured. A common scenario would be for the survivor to become the sole trustee and beneficiary after the death of their spouse. At that point, all of the same options for termination that we have described would be available.
Attend a Free Estate Planning Seminar!
Our attorneys have scheduled a series of seminars that are coming up in the near future, and we are particularly excited about the material that will be presented this time around. You can walk away with a lot of very useful knowledge if you attend one of these sessions, and Best of all, there is no admission charge.
To see the schedule and obtain all the details, visit our seminar page. Once you identify the session that you would like to attend, click on it and follow the very simple instructions to reserve your seat.
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