A trust is a legal document that provides instruction as to how the property titled in the trust’s name is to be managed. These written instruction can provide important legal benefits. A trust is a legal entity in itself capable of owning assets. Although there are several different types of trusts, the most common trust is a revocable trust.
A Revocable Trust is a document for titling and management of one’s assets during your lifetime, in the event of disability and upon death. The primary purpose of a Revocable Trust is to establish a structure to manage assets for the intended beneficiaries. It contains provisions such as; who should manage the financial affairs in the event of a disability; who should administer the trust estate upon death; and how the trust estate should be divided and distributed after death.
A Revocable Trust (also known as a Living Trust or an Inter Vivos Trust) is revocable or amendable during your the lifetime. The parties involved in a trust are:
Grantor (Trustor or Settlor) is the individual that creates the trust (you). You transfer all your interest and title to your assets into the trust. This is called funding your trust.
Trustee is the individual you name to manage the trust assets in accordance with the provisions set forth in the trust document for the benefit of the beneficiaries. The first trustee is typically the Grantor until the Grantor dies or becomes incapacitated.
The general duties of a trustee involve the collection, management and investment of the assets in the trust. Accumulation of assets not titled in the name of the trust at death. The distribution of income and principal to the beneficiaries named in the trust.
Beneficiary is the person you intend to give your assets to upon death.
It is important to note that a Revocable trust will not protect you from lawsuits. It will however assist you in avoiding probate.
In order to determine whether or not a Revocable Trust is an appropriate vehicle for you, call our office at 847-786-8999 to schedule an appointment.
At M&A Law Firm, we routinely assist our clients with personalizing an estate plan that takes into account their specific circumstances. Often this entails establishing one of the other several types of trusts:
- Testamentary Trust
- Credit-Shelter Trust
- Generation Skipping (“GST”) or Dynasty Trust
- Qualified terminable interest property (“QTIP”) Trust
- Qualified domestic trust (“QDOT”) Trust
- Irrevocable Life Insurance Trust (“ILIT”) Trust