What is a trust?
There are many different types of trusts. The most common type of trust is a revokable living trust. A revokable living trust, like a will, is a written document that nominates a person to handle your affairs and directs who should receive your property. A trust, however, is effective immediately; it doesn't wait for death. It is effective during your lifetime, during any period of disability, and after death. When properly funded, a trust also avoids court and keeps your affairs private.
Legally speaking, a revokable living trust is a formal relationship where you (the trustmaker) name an individual (trustee) to manage your accounts and property for your benefit and the benefit of others (beneficiaries). Because the trust is effective during your lifetime and you can change it, it is referred to as a "living" document.
- specifies how you want your property to be divided and who you wish to receive your property
- avoids involvement of the probate court if the trust is fully funded (meaning the ownership of the accounts and property has been changed from you as an individual to your trust)
- names the person you wish to handle your affairs upon your death (successor trustee)
- names the person you wish to handle your affairs if are still alive, but unable to do so yourself (trustee)
- allows for the continuous management of your accounts and property
- can include estate tax planning
- can include income tax planning
- can provide asset protection for heirs/beneficiaries
- permits you to cancel or change your wishes during your lifetime
- costs more than a simple will on the outset but may cost much less upon administration, while typically providing significantly more value
A trust does not:
- name guardians for minor children
- name an executor or personal representative, which may not be needed if trust if fully funded and/or proper beneficiary designations have been made.
A revokable living trust can be canceled or changed during your lifetime. A revokable living trust costs more than a will on the outset, but may cost much less upon administration, while typically providing significantly more value
To find out if a trust is right for you, click below to schedule a free 15-minute Introductory Call, or use my online form.