A lot of people who have not probed into the subject of a living trust reduce the process of estate planning to the creation of a last will. In fact, there are other asset transfer vehicles that can be preferable when certain circumstances exist. Plus, a well-constructed estate plan will address end-of-life issues.
The estate planning device that is the best choice for many people is the revocable living trust. In this post, we will provide an overview in the form of a hypothetical question and answer session with a Huntersville living trust attorney.
Trusts are only useful for very wealthy people, right?
This is one of the most common misconceptions that people have. There are some types of trusts that are used by high net worth individuals who are exposed to estate taxes. These would be irrevocable trusts, but a revocable living trust is entirely different.
In fact, except for married couples, a revocable living trust is not designed to deal with death taxes.
Do I surrender control of assets that I sign over to a living trust?
The anatomy of a living trust will involve the grantor, who is the person creating the trust. There is a trustee who is the individual or entity charged with the administrative tasks. A living trust will also have a beneficiary, or multiple beneficiaries, that can receive monetary distributions.
While you are alive, you can act as the trustee and the beneficiary of your own living trust so you maintain total control. Since the trust is revocable, you can even dissolve it entirely and take back direct personal possession of the assets if you choose to do so.
Of course, it is unlikely that you would ever want to go that route because you are using the trust as an estate planning tool. In the trust declaration, you name a successor trustee to administer the trust after you are gone, and your heir or heirs would be the successor beneficiaries.
Who can serve as a living trust trustee?
As we stated in our answer to the previous question, a person or an “entity” can serve as a living trust trustee. Any adult who is of sound mind and is willing to assume the role can act as a trustee. Of course, the individual should be impeccably responsible and capable of handling monetary resources effectively.
Another option would be to use a professional fiduciary. Banks and trust companies offer trustee services, and there are a number of benefits to choosing a corporate trustee. Of course, there is a considerable cost as well so you have to weigh the entire situation carefully.
What happens if I have a trust and I become incapacitated?
This is a good question because a very significant percentage of elders become unable to make sound decisions at some point in time. If you have a living trust, you can name a disability trustee to act as the administrator, or successor trustee, in the event of your incapacity.
What is the primary benefit of a revocable living trust?
The answer is somewhat subjective, but one of the best things about a living trust is the fact that you consolidate all of the assets that will comprise your estate in one place. This streamlines the administration process, and a joint living trust can be useful for married couples.
You also have the ability to leave instructions to the trustee with regard to the way you want the assets to be distributed to the beneficiaries. For example, if you want the assets to be invested to earn ongoing income, you could instruct the trustee to distribute the earnings to the beneficiaries. You can also provide asset protection for your beneficiaries after you are gone, whether you are concerned about divorce, poor money management, immaturity, or special needs or have other concerns.
Attend a Free Estate Planning Seminar
Our Huntersville living trust attorney frequently holds informative seminars. You can learn a great deal if you attend one of the sessions, and there is no admission charge. To see the dates and obtain registration information, visit our seminar schedule page.
Schedule a Consultation!
If you are ready to discuss your estate planning objectives with a licensed attorney, we are here to help. You can send us a message to request an appointment, and we can be reached by phone at 704-944-3245 (Charlotte, NC and Huntersville, NC), or for individuals in Kentucky, at (606) 324-5516 (Ashland, KY) or (859) 372-6655 (Florence, KY).
John’s practice focuses on the use of Wills and Living Trusts in Estate Planning to help individuals protect their families and preserve their legacies after their deaths, but his practice also focuses on the critical issues of protecting individuals with dementia or other diminished capacity, assisting individuals in qualifying for Medicaid and other government benefits to offset the costs of long-term care, and providing special needs planning.
John is admitted to practice law in North Carolina, South Carolina, Kentucky, and Ohio, and he is accredited by the Department of Veterans Affairs.
- What You Need to Know about the Medicaid Look-Back Rule - January 3, 2023
- How to Pass Down Your Legacy in Your Estate Plan - October 3, 2022
- Practical Steps to Take after Receiving a Terminal Diagnosis - September 30, 2022
