While you’re working on your estate plan, one of the things you may want to do is establish a living trust. A living trust is a formal, written document that establishes a trustee who will take control and possession of assets that are placed in a trust. A living trust also tells the trustee how to manage or administer those assets.
When you set up the trust, you, the grantor or settlor, are usually the initial trustee. A successor trustee only takes over when you are incapacitated or pass away.
What can a trustee do with a living trust?
With the power granted in a living trust, a trustee is authorized to exercise certain powers to manage the trust without needing to go to probate court. When you’re the grantor, you have a right to state who will become a beneficiary of the trust and the requirements that must be met to receive the distributions.
Is a will the same as a living trust?
No. Although there are some similarities, wills and living trusts are not the same. With a living trust, your assets and property are moved into the trust while you’re still alive. With a will, your property is not passed on until you have passed away.
Additionally, some wills still need to go through probate court once a person dies, whereas the assets in a living trust are protected against probate.
You can establish a living trust at any time, which allows you to start putting money or assets into the trust over the course of your lifetime. You are also able to remove assets from the trust or amend it at any time, which is one of the major benefits of a living trust.
How can I establish a living trust?
While you’re working on your will and other parts of your estate plan, you may want to talk to your attorney about a living trust and if it would be beneficial for your estate. It’s possible to add a living trust to your estate plan relatively easily once you decide what you’d like to add to one and who you’d like to have benefit from your estate.