What is a living revocable trust? A living revocable trust is where you take all of your assets and put them into a trust that names you as a trustee. You become the trustee for the benefit of all the beneficiaries named in the trust. This would include yourself as well as your loved ones and your family. A trust is a contract where property and assets are transferred or one person to another to be held for the heirs and beneficiaries named within the trust. The terms and conditions that are contained within this agreement outline specific rights of the beneficiaries that are also named. For the most part there is not a whole lot of difference between the trust and a will except that all assets are put in the trust during the executor’s lifetime as opposed to everything being transferred upon the executor’s death. LA probate law defines the grantor as the person who owns all of the assets that are named within the living trust. Often times the motivation for setting up a living trust is so that these assets are taken out of that person’s name to protect them, reduce the chances of lawsuits, eliminate probate, taxes and in some cases to gain a tax benefit. A revocable trust is made during the grantor’s lifetime and allows them to have a certain amount of control over the assets that had been put into the trust otherwise it is called an irrevocable trust. Having a living trust can be damaging to your estate in the instance of there being a lawsuit.
The main purpose that people get living trusts is to eliminate the probate process and this is possible because the assets are put into the trust while a person is living and those assets are taken out of the person’s name and put into the trustees name instead. This trustee can be the person whom the assets belonged to in the first place but by placing them into the trust it keeps them from having to be put through the probate courts. Any assets that are not in trust will be sent through the probate courts regardless of whether they are covered by a will or not. Those not covered by a will end up being dispersed by the courts as the judge sees fit. LA probate law allows the person who owns the trust to retain a certain amount of power over his assets but does not shield him or her from those assets being affected by lawsuits that come up in the future. When it comes to who you will end up choosing to be the trustee or the successor trustee if you are named as the initial trustee is a decision that should be mace with great care and only after a good deal of thought as to who you feel you trust with this kind of responsibility. The person you appoint will be bound by the contract and held responsible for managing and controlling these assets. He does this to up hold the best interest of the beneficiaries that are named within that trust. You can choose anyone to appoint as your trustee so long as they are not blood related to you. You also have the choice of choosing more than one person to appoint as trustee. This can help ensure that the best interest of your assets and the beneficiaries of those assets are always the number one priority.
LA probate law has very strict guidelines and rules that are imposed on the person who has been appointed trustee of a living will. This person is not allowed to gain any advantage from the trust in which they are overseeing unless this has been expressed specifically through the trust. Examples of this would be fees that he or she may charge for their services in the event that they are professional trustees. This has to be accounted for down to the very last detail. The trustee has to be able to show proof of all these things to the person who owns the living trust as well as to the beneficiaries of the living trust. This is by many considered to be the most efficient way to transfer your wealth and assets to your beneficiaries from a tax standpoint. The laws surrounding the trustee responsible for a living trust are very strict in regards to how they exercise their powers.
The reason that people get living trusts in the first place is to help protect those that they name as their beneficiaries. Beneficiaries include your spouse or significant other, children, grandchildren and charities. LA probate law requires that at some point living trusts must end. The amount of time that a trust can exist will vary depending on the laws of the jurisdiction where the trust was made up. If the trust is drawn up outside the United States there may benefits of Foreign Asset Protection Trusts. These tend to provide a little more protection as they are generally stronger than domestic trusts. It cannot go on and on for an undisclosed amount of time. There is no limit as to the amount of beneficiaries you have except your assets themselves. Most trusts that are set up are irrevocable trusts. Make sure that you are choosing the best estate planning action for you and your estate by contacting a local attorney to help you make the right decision.
- Things You May Need to Update in Your Estate Plan When You Enter Retirement - March 22, 2023
- 10 Estate Planning Tips You Cannot Afford to Ignore - March 21, 2023
- 7 Estate Planning Steps for the Beginner - March 16, 2023