You have probably heard through your family and colleagues that you should have a Living Trust as part of your Estate Plan.
After hearing this, your first question is What is a Living Trust?
A Living Trust is an agreement between you (the “maker” of the trust) and the trust’s “trustee” (the one who manages the assets of the trust). During your lifetime, you can be both the “maker” and “trustee” of your Living Trust.
The law recognizes your Living Trust as a separate legal entity from you. As the maker of your Living Trust, you can transfer assets (property, bank accounts, beneficiary rights, etc.) into your Living Trust, and provide directions to the trustee on the management of these assets while they are held in your Living Trust. These instructions specify how these assets are to be held and used during your lifetime, as well as how these assets are to be distributed following your death.
Living Trusts are revocable, meaning that you have the power to change the terms of the trust, or do away with the trust in its entirety. You also have the power to add or remove assets from your Living Trust, and control and direct all payments from your Living Trust.
During your lifetime, you can make all decisions concerning the assets in your Living Trust. Your Living Trust can also provide a way to manage your assets during periods of your disability.
Your Living Trust agreement can also be drafted with terms that when they are administered correctly, all of your assets held in your Living Trust can avoid probate at your death and estate taxes. For example, if you transfer all of your assets into your Living Trust, when you die, you no longer have any assets in your personal name that must be distributed through a Will. By doing so, you have avoided Probate with regard to the assets transferred into your Living Trust.
We will continue to explore Living Trusts in future articles on this website.
If you have any questions about Living Trusts, or any other Estate Planning matter, please contact the Ishman Law Firm, P.C. at firstname.lastname@example.org or (919) 468-3266.