A trust is an entity (like a corporation) established to hold and manage property. It has its own separate existence apart from the grantor or creator of the trust. Trusts can be established during one’s lifetime (a “living” trust) or they can be established at death through a will (a “testamentary” trust). In the case of the former, a trust can be either revocable or irrevocable.
There are three major participants in a trust: a grantor, who is the person creating the trust (sometimes called a “settlor” or “trustor”); a trustee, who is the person who manages the trust; and a beneficiary, who receives the benefits of the trust. No doubt, the ability to outsource responsibility over an individual’s estate is a powerful tool. It allows us to place a capable individual or institution in charge of the assets for someone else’s benefit.
In the case of a revocable living trust, the most commonly used vehicle for estate planning today, this means the trust is able to remain in effect even if the trustor dies or becomes incapacitated. The backup trustees simply carry out the grantor’s wishes set forth in the trust without probate or court involvement. The trust is totally revocable and amendable by the grantor during his or her lifetime. Since the grantor usually serves as the trustee and beneficiary during lifetime, the grantor also maintains total control over the assets.
Summary of Revocable Living Trust Benefits:
(1) Avoids probate at death
(2) Avoids multiple probates if you own assets outside of Utah
(3) Avoids Conservatorship during lifetime
(4) Avoids Conservatorship for minors who might have received the assets
(5) Provides privacy
(6) Often allows quicker distribution of assets (especially in smaller estates)
(7) Prevents unintentional disinheriting
(8) More difficult to contest than a Will
(9) Provides complete control to you during your lifetime, including ability to cancel or amend
(10) Through proper planning, estate and gift taxes can be lowered and potentially avoided entirely through use of a trust.
Ready to set up or revise your trust? Give us a call at the number listed below to schedule your free consultation.
