When some people hear about revocable living trusts for the first time, they’re confused by the notion that by transferring your property to the trust you can gain certain benefits. Though transferring estate property outside of probate and maintaining privacy is appealing, a lot of people are uncomfortable with the idea of having to transfer their property to the trust. These people often fear that by doing so they will lose control over their property and leave it up to some stranger to manage it for them. These fears are largely unfounded, and here is why.
The process of creating a revocable living trust begins when you decide to, with the aid and counsel of your lawyer, make and sign the trust creation document. You will then begin the process of funding the trust, meaning you will transfer the property you currently own in your name into the trust’s name. Anyone who creates a trust is called a grantor, though the terms settlor and trustor can also be used.
The initial trust creation process isn’t complicated, but where many people pause is when they realize that, after they transfer the property to the trust, it will be up to a trustee to manage it. The trustee is someone the grantor selects to manage everything the trust owns, and to do so on behalf of the beneficiaries, who get to use and benefit from the property.
What’s important to remember is that when you create a revocable living trust, you, the grantor, are usually also both the beneficiary and the trustee.
The creation of a revocable living trust essentially gives you the ability to maintain total control over all your property, while at the same time allowing the property to be owned under the name of your living trust instead of you.
So, let’s say you have decided to create a revocable living trust. After signing the trust document and consulting with your attorney about what property you can, should, and should not transfer into the trust, you decide that you want to transfer your checking account.
Your next step will probably be to contact your bank and ask what kind of documents you need to fill out in order to transfer the account. Once you complete the steps required by the bank, the checking account will no longer be under your name, but rather under the name of your living trust.
During this entire process, from the trust creation stage to the time when you actually finalize the transfer, the account and all of the money within it is never outside of your control.
Latest posts by Michael Robinson, Estate Planning Attorney (see all)
- Beneficiary Designations, etc., Aren’t a True Substitute for a Trust - April 17, 2019
- What Are 529 Plans and What Are Their Advantages? - April 17, 2019
- Have You Heard of These Trusts? - April 16, 2019