Living Trust Lawyer
Revocable living trusts have become the estate planning tool of choice for many families for a variety of reasons. This type of trust is much easier to manage than an irrevocable trust, but it must be set up properly to accomplish your goals.
At Chesapeake Wills & Trusts, we can craft a living trust tailored to your specific needs. We can also assist with managing and funding the trust properly so that you can gain the most benefits with the least administrative burdens.
How a Living Trust Works
Trusts are legal entities set up to hold property. The person who sets up the trust is usually called the grantor. Property in the trust is managed by the trustee who distributes it to the beneficiary.
A revocable living trust is a trust that is created during an individual’s lifetime in contrast to a testamentary trust set up in a will to take effect after the creator passes away. Because it is revocable, it can be changed or revoked at any time. For tax purposes, the property in the trust is still considered to belong to the grantor, so there is no need to file a separate tax return for the trust.
In most cases, people who set up living trusts serve as both the trustee and the beneficiary, although they would designate an alternate trustee to take over if they are unable to perform the duties, and they would also designate one or more alternative beneficiaries. The grantor who creates the trust manages their property the same as they did before they transferred it into the trust. As trustee and beneficiary, they can distribute property for their own use however they want to. Essentially, nothing changes during the regular course of events.
The Benefits of a Living Trust
However, if the grantor becomes incapacitated, the alternate trustee can step in and manage the trust property on their behalf. This can prevent the need for costly and complex guardianship proceedings.
When the grantor passes away, the trustee settles up final bills and the remaining property goes to the alternate beneficiaries. With a trust, there is no need for approval from probate court, no need to file inventories, and no need to go through a long court-supervised process. If you own real estate in more than one state, this is a double benefit, because your loved ones would need to deal with probate in each state where you own real property.
Winding up your affairs with a trust is much easier on loved ones than formal probate, and that is the primary reason most people set up living trusts. They go through some initial formalities to set up the trust and transfer ownership of property into the trust, and then that prevents loved ones from having to deal with costly formalities later.
Funding the Trust
Once you have an attorney review your goals and draw up a trust document to meet your needs, it is important to transfer ownership of property into the trust. Some assets, such as furniture, can be covered by language in the trust. Other property, however, such as real estate, requires specific action.
You should have new deeds drawn up to transfer ownership of any real estate you own. Vehicles and accounts without joint ownership or beneficiary clauses also require formal name changes. It is a good idea to review assets with your estate planning attorney and decide how each asset should be handled.
Protect Your Family with a Living Trust Prepared by Chesapeake Wills & Trusts
Trusts can be complex and confusing, and many people are not sure they are the right choice for their situation. At Chesapeake Wills & Trusts, we would be happy to review your circumstances and goals, and help you choose the right options to protect your family. Contact us to schedule a consultation today.