Living Trusts
Why have a living trust?
A living trust is a legal document that partially takes the place of a will. By making a living trust, your assets, such as your home, stocks, bank accounts, cars, etc., are put into the trust, and managed by someone you designate during your life, and then the assets are transferred to your beneficiaries upon your death. You can designate yourself as trustee ( or manager ) to manage and control your own assets while you are living and then specify a successor trustee ( or institution; normally a bank) to manage it upon your death or if you are unable, not competent or unwilling to do so.
The majority of living trusts are revocable living trusts (also known as a revocable inter vivos trust or a grantor trust). A revokabletrust may be amended or revoked at any time by the person(s) who made it (also known as the trustor(s), grantor(s) or settlor(s)) as long as he or she, or they are still competent.
A living trust agreement:
- Gives the trustee the legal right to manage and control the assets held in your trust.
- Instructs the trustee to manage the trust's assets for your benefit during your lifetime.
- Designates the beneficiaries (persons and/or charitable organizations) who are to receive your trust's assets upon your death.
- Lays out the specific powers and authority to the trustee to manage and distribute your trust's assets. The trustee is a fiduciary, which means he or she holds a position of trust and confidence and is subject to strict responsibilities and very high standards. For example, the trustee cannot use your trust's assets for his or her own personal use or benefit without your explicit permission. Instead, the trustee must hold and use trust assets solely for the benefit of the trust's beneficiaries.