What happens if I die or become incapable? With most living trusts, someone else, such as a trusted friend, relative or professional trustee, takes over the trust if you die or become incapable. Currently, the trustee has certain legal obligations, including: In addition, there are two secondary benefits to a living trust. One is privacy. Unlike a will, the contents of a living trust are not a public matter. Like most court cases, probate files are open to the public. Anyone can go to the courthouse and review your probate file, which will likely identify the value of your estate, where you live, and the names and addresses of your legal heirs. In Illinois, under the simplified estate administration procedure known as “independent administration,” there is no need to file an inventory and accounting with the court, and as a result, the most important documents showing the deceased`s assets are not published. Even though the independent management process reduces the amount of personal information available to the public, a living trust still offers the highest level of privacy protection because it does not go through the probate process at all. Once the escrow document is created, the settlor must transfer to the trust the assets it wishes to cover through the trust. For most items, this simply means that a list of properties is attached to the trusted document. However, ownership of securities such as real property must be renamed in the name of the trust. This must be done correctly to avoid the reduction and usually requires additional time and expense. Unlike a will, which only takes effect upon your death, a living trust (also called a “revocable trust” or “inter vivos trust”) comes into effect during your lifetime and is revocable (can be amended, supplemented or terminated).
A living trust is created through a trust agreement document that, among other things, specifies who the trustee should be and explains how the trust should be administered during your lifetime and after your death. However, it is important to remember that the escrow document simply establishes the trust, which remains empty until it is properly funded, or in other words, until the assets are actually contributed to the trust. To maximize the benefits of a living trust, it is important that you properly transfer the assets you have chosen to the trust at some point. You can also create an “irrevocable” living trust, but this type of trust cannot be revoked or amended, and such a trust is conducted almost exclusively to achieve certain tax or asset protection results that are beyond the scope of this summary. A living trust is a legal document or trust created during a person`s lifetime by which a designated person, the trustee, is given responsibility for managing that person`s property for the benefit of the prospective beneficiary. A living trust is designed to allow for the easy transfer of assets from the creator or trustee of the trust, while bypassing the often complex and costly legal process of the estate. Living trust agreements designate a trustee who has rightful possession of the assets and property that are paid into the trust. If I have a living trust, do I still need a will? Yes. You must sign a “will to forover” with your living trust. A payout will is a safeguard for any property that may not have been properly transferred to the living trust during the trustee`s lifetime. Without a will, any property acquired after the formation of your living trust that is inadvertently registered in your name rather than your trust would normally pass to your heirs under state law, who may or may not be the same people you designate in your trust to preserve your assets upon your death. The installment will ensures that these assets are added to your trust so that they are ultimately distributed to the beneficiaries you designate in your trust., If you have young children, you can use your will to appoint a guardian for your children if you and the other parent die or are otherwise and otherwise unable to do so.
Take care of your minor children. So let`s go over this concept of a revocable life trust and find out if these are accurate representations and if you need them. So we pull back for a second and look at a trust itself. What is trust? It`s not difficult, it`s just a way to hold property, and there are three players involved. Normally, if I own my own property, I am the only player, but if I decide to transfer my assets in trust, then the name I take is the trustee of the trust. Some people will call it a gutter, others will call it a trustor, that`s fine. Again, no magic word. I will call myself the settlor. Revocable life trusts are similar to wills in many ways. Like wills, revocable living trusts allow the settlor to name beneficiaries, leave property to young children, and revise the document if the settler`s circumstances or wishes change.
However, revocable life trusts contain several benefits that wills do not offer. A revocable trust allows the settlor to retain sole control of the trust. Most trusts are revocable because life circumstances change. Although the settlor does not receive tax benefits from a revocable trust, the settlor may withdraw funds from the trust or amend or terminate the trust at any time. A well-worded trust will say that. Maybe my son, maybe my son and daughter, maybe my son, my doctor and my daughter will find out that I am unable to work. My trust document can say what I wanted to say. That`s what`s beautiful. For example, I can say, keep me home as long as possible. Leave me at home. I don`t want to go to a nursing home.
Or I can say, if I need to go to a nursing home, I want to go to the most expensive home you can find. Okay, I want a big room, and I wanted a companion 24 hours a day, and I don`t care how much it costs. Ok, my daughter can`t complain because I wrote that this is what I want. Okay, I want nice clothes. I don`t care if I`m in a nursing home, I want to dress well. I love my grandchildren. I want them to be able to visit me every year and pay for it. And perhaps most importantly, my little dog Fluffy, if she`s still alive, when I`m in foster care, I want you to take care of her. So the beauty of this is that I can manage my disability in advance by telling my son exactly how to spend my money. Irrevocable trusts are different from revocable trusts, which can be terminated until the death of the Settor. The two most common motivations for irrevocable trust are reducing taxes and protecting property.
Revocable living trusts are also useful for married couples with separate property acquired before the marriage, as the trust helps separate that property from joint property. Revocable trusts can also be used to regulate a guardian`s spending habits for the benefit of the administrator`s children.