When you find out about some of the drawbacks that come with using a last will as the centerpiece of your estate plan, you may be interested in an alternative. For many, the legal device called a revocable living trust will be a better choice. Contrary to popular belief, you don’t have to be extremely wealthy to benefit from this type of trust.
There are other trusts that can be utilized, and we will look at them in future blog posts. In this piece, we will examine the trust administration process and the role of the trustee as it applies to a revocable living trust.
The Anatomy of a Living Trust
If you were to establish a living trust, you would be called the grantor or settlor. The beneficiary is the person that can receive distributions of property from the trust. You can name multiple beneficiaries if you choose. There is also a trustee who acts as the trust administrator.
People that have not looked into the subject thoroughly sometimes assume that you surrender all control of assets that you convey into any type of trust. For this reason, they think they should use a last will because they don’t want to give up control.
With a revocable living trust, there is absolutely no loss of control. While you are alive, you can be the trustee and the beneficiary. And remember, the “revocable” designation means you can dissolve the trust entirely and take back direct personal possession of the property if you ever choose to do so for any reason.
Choosing a Successor Trustee
The purpose of the trust is to serve as an estate planning tool so you have to address the events that will take place after you pass away. You name the beneficiaries who succeed you, and you would also name a successor trustee.
Technically, any adult who is of sound mind and is willing to assume the role can be named as the trustee of a living trust. The part about being “willing to assume the role” is something to think about.
It can be a challenging position in a number of different ways so you should certainly have a meaningful discussion with your candidate. On the surface, it can seem like a great honor to be entrusted with this position, and a person may agree without knowing everything that must be done.
You also have to evaluate anticipated longevity when you are naming a trustee, especially if you choose to have the trust remain intact for a considerable period of time after you are gone. Plus, conflicts of interest can enter the picture if you name someone who has relationships with beneficiaries.
There are ongoing costs involved so it is not always the best choice, but it is possible to engage a professional fiduciary to act as a living trust trustee. The trust department of a bank would offer this service, and there are trust companies that handle trust administration.
When you have a corporate trustee, you have a financial pro at the helm to handle income producing assets if they are part of the trust. Longevity would not be a concern, and there would be no conflicts of interest. A professional trustee would also understand all of the steps that must be taken from a procedural perspective.
Attend a Free Seminar
To learn more about Ashland estate administration and many other important estate planning topics, attend one of our upcoming seminars. The sessions are very informative, and they are being offered free of charge at the present time. You can visit our seminar page to see the schedule and obtain registration information.
We Are Here to Help!
If you are ready to discuss your estate planning goals with a licensed attorney, our doors are open. You can send us a message through our contact page to request a consultation appointment, and you can get in touch with us by phone at 606-324-5516 (Ashland, KY) or (859) 372-6655 (Florence, KY) or for individuals in North Carolina, at (704) 944-3245 (Charlotte, NC or Huntersville, NC).
- 2022 Estate Tax Exclusion Has Been Set - December 6, 2021
- An Overview of 2022 Medicare Cost Increases - November 24, 2021
- Elder Financial Abuse Is a Looming Threat - November 22, 2021