The Basics of Living Trusts
Many people mistakenly believe that wills do not have to go through the probate. This is not true! In fact, the best way to avoid the arduous probate process is to make a living (or inter-vivos) trust. These trusts can be created in conjunction with a will, or as an alternative to one. Creating a living trust will save time, money, and the hassle of dealing with probate hearings. Here, we'll look at the basic aspects of living trusts.
What is a Living Trust?
A trust is a legal entity with the sole purpose of holding assets. Living trusts are called so because they hold a trust maker's assets while the person is still alive. Truthmakers intend for these assets to be distributed upon their death in the manner specified in the trust.
Who Are the Parties in a Trust?
People who are associated with a living trust are designated in one of three ways. First, the person making the trust is called the "trustor" or sometimes the trustmaker. The person who is given the duty to manage the trust is the trustee. Finally, those who will receive property from the trust are called the beneficiaries.
What Assets Can be Included?
Trusts can hold various types of property. Trustors usually place some or all of the following into a living trust:
- Real property (homes or lots)
- Investments (mutual funds, stocks, etc.)
- Bank accounts
- Safety deposit boxes
- Life insurance policies
- Intellectual property rights
- Foreign assets
- Miscellaneous types of personal property
In general, a person should put all their assets into the trust. However, there may be situations where assets are better left outside the trust. For personalized advice regarding trust assets it is best to consult a probate lawyer.
What is Funding?
Funding occurs when the assets are legally transferred into the trust's name. Yet, this does not mean that the trustor gives up his or her rights to manage the property. Living trusts allow the trustor to remain in charge of the assets until a designated time. For example, the trustor can add or remove items from the trust. The trustor can also sell trust assets. Overall, the funding process can be difficult and time consuming. Therefore, it is recommended to get help from an experienced attorney.
The Benefit of a Living Trust
The main benefit of living trusts is that assets won't have to be probated. This ensures that property can be easily distributed and that money from the estate won't be spent on court costs. It's also a good idea to create a pour-over will so that any assets not accounted for can be transferred into the trust.
It can be challenging to create a living trust the right way. In order to make sure your estate is fully protected you should contact T.R. Spencer Law Office. An estate lawyer is available to discuss your situation and determine the right arrangement for you. Get in touch with the Sandy law office for an immediate consultation at 801-566-1884.