A revocable living trust is a legal document that allows you to avoid probate if properly drafted. Known legally as a “revocable inter vivos trust,” a living trust allows you to retain full control of your property while you are alive. After your death, the assets within your trust pass to your beneficiaries through your appointed trustee.
To be legally effective, a legal trust must have trust property or assets at the time of creation. In other words, you will need to place some assets within your trust in addition to having a written trust document. If you do not fund your trust with assets, your trust document is null and fails as a living trust.
What assets can you place in a revocable living trust? You can fund your living trust by placing your individually owned real estate, certificates of deposit, investment and bank accounts and stocks into trust. While you are still living, you can appoint yourself as the trustee. As such, you are both the grantor of the living trust and trustee of the living trust. By serving as the trustee, you retain legal control of your trust’s assets. You must appoint a successor trustee that will be the trust’s fiduciary or legal administrator after you die.
Living trusts are not wills. By operation of law, a will becomes effective only after you die. However, an inter vivos living trust is effective when you create and fund your trust. When you die, your successor trustee transfers the assets within your trust to named beneficiaries.
A living trust may be less costly to administer than a will. Speaking with an attorney in our office can help you decide whether your financial estate plan should include a living trust document.
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