LIVING TRUST

The significant objective of a Living Trust is to avoid probate. A revocable living trust, unlike a will, offers a private, probate-free way to transfer your property after death. The person who creates a living trust is called a grantor. The grantor executes a trust document that establishes the trust.

The grantor transfers ownership of property to the trust and appoints a trustee to manage the trust property. The grantor can choose to be the trustee, retaining control of trust property. The grantor can also name one or more “successor trustees.” The successor trustee will take charge of managing the trust property if and when the primary trustee becomes incapacitated or passes away.

The grantor also names beneficiaries of the trust. Beneficiaries are the individuals (or other entities) who benefit from the trust. The grantor names beneficiaries who will inherit the property held within the trust after the grantor’s death. 

How Does a Living Trust Avoid Probate?

The assets that are held within the trust transfers to these beneficiaries without going through the probate process.

Creating a Living trust is definitely a more effective way to transfer property at death, especially large-ticket items such as a car, house, or business

Upon your death, the successor trustee arranges the transfer of assets through the trust administration process. This is faster than the probate process, which can take months or even years to facilitate the transfer of assets to those who inherit them.

The probate process is also public record, while assets held in a trust transfer privately. And the trust administration process is often less expensive than the probate process, preserving more of the estate’s assets.

In certain circumstances, you can specify that your successor trustee takes over the management of trust assets in the event of your incapacity. This can spare your loved ones from being forced to go to court and get a guardian or conservator appointed if you do not have a trust or a power of attorney in place.

Unlike an irrevocable trust, which generally cannot be changed and which requires you to give up more control over your assets, you retain control over the property you transfer into your living trust. Not only can you be the trustee during your lifetime, but you can also modify the terms of the living trust or cancel it any time you’d like.