A revocable living trust is a very versatile estate planning device that can be the right choice for many people. The first thing that you should know about this type of trust is that you do not have to be extremely wealthy to reap the benefits.
When you convey property into a living trust, you are making the trust the owner of the property, but you would essentially be the trust in a figurative sense. You would continue to control and access the resources as usual.
The idea is to use the trust for estate planning purposes, so you have to account for the things that take place after your passing. In the trust declaration, you name a successor trustee to act as the administrator, and your heirs would be the beneficiaries.
We are not going to get into all the benefits of living trusts here because we will do it in future blog posts. Right now, what we will do is explain some of the duties of the trustee so you understand how to make the choice when you are putting your plan together.
Someone That You Know
You can name someone you know to act as the trustee as long as the person is an adult who is of sound mind. In fact, under certain circumstances, you may want to make the beneficiary the trustee.
For example, let’s say that you have one son, and you intend to leave him everything that you have left after you are gone. You could make your son the beneficiary, and he could also be the trustee. He would follow the terms of the trust that you recorded and become the owner of the property.
Under other circumstances, you could name a friend or a member of your extended family to act as the trustee. If you go this route, you have to make sure that the person you choose is willing to accept the role, and you should evaluate the person’s anticipated longevity.
The financial acumen of the potential trustee would be another factor to consider, and you have to ask yourself if there will be any conflicts of interest or personal loyalties that could make it hard for the trustee to proceed objectively.
Another option would be to engage the services of a professional trustee. Trust companies and the trust departments of banks provide trustee services.
There is a certain cost involved if you use a professional trustee, but it can be worth it if the trust is well-funded and it is structured to remain intact for an extended period of time.
Succession would not be a factor, and the assets in the trust would be in the hands of a competent financial manager. The inherent organizational oversight is a very good thing, and the trust would be handled in a completely unemotional manner.
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