If you meet with an attorney about your estate plan, there is a good chance he or she may recommend you put your property in a revocable living trust, depending on your circumstances. There are many reasons why living trusts are often the preferred method of transferring property to your heirs. See benefits of living trusts. Nevertheless, many people are actually afraid to put their property in a living trust. This is usually due to misconceptions about how a revocable living trust works.
It is surprising how many people have fears about putting property in a living trust. Often, these fears relate to a false perception that making a revocable living trust requires you to give up control of your property. Making a revocable living trust does not mean you cannot sell living trust property in the future. Unfortunately, many people fail to complete their living trust documents because they are concerned about giving up control of their property.
In a typical revocable living trust, the person making the living trust, called the grantor, places property in the living trust by executing title transfer documents such as trust transfer deeds and other documents that change title to property. Title to living trust property is typically held in the name of the original trustee of the living trust. When you make a living trust, you typically serve as the original trustee. If you make a revocable living trust with your spouse, you and your spouse will usually serve as co-trustees. By serving as the trustee, you maintain control of property placed in the living trust.
As trustee of your living trust, you can sell trust property, transfer it to a third party, encumber it with liens, etc., in the same manner as if you held title to property in your own name as an individual. However, when you execute documents regarding title to trust property, you sign in your capacity as trustee.
If you decide to sell or give away every piece of property in your revocable living trust, you have the right to do so while you are the trustee during your lifetime. The successor trustee named in your living trust takes over management and distribution of living trust property after you are deceased. If you and your spouse are co-trustees, the surviving spouse is typically the sole trustee upon death of the first spouse.
Note: the information outlined above applies to a typical revocable living trust. The information set forth above does not apply to circumstances in which someone other than the grantor is named as the original trustee of the revocable living trust. Naming someone other than yourself as trustee raises other important issues as well, such as how tax returns are filed for the living trust. Consult an attorney if you plan to name another person as original trustee of your revocable living trust.
The manner in which your living trust will operate depends on the specific terms and provisions set forth in your living trust document and other documents in your unique estate plan.
The Living Trust Advisor by Jeffrey L. Condon. Featuring great advice about whether you really need a living trust, how to choose a successor trustee, issues involving your spouse, transferring real estate to a living trust, estate tax issues, maintaining the living trust after your spouse dies, and deciding how to divide property among your children.
What You Need to Know About Living Trusts
One of the best guides to understanding living trusts is The Living Trust Advisor: Everything You Need to Know About Your Living Trust. The author provides a clear explanation of how living trusts work and addresses the most common concerns people have about transferring property to a living trust. For example, if you want to know whether you will still own your house if you make a living trust, this guide provides answers to those types of questions.
The Living Trust Advisor: Everything You Need to Know About Your Living Trust covers other key issues involved in making a living trust, such as what happens after the death of a spouse when a living trust is involved, including when a surviving spouse remarries. It also covers important estate planning issues such as leaving inheritances to your children in unequal shares, maintaining control over property after your death, and changing your living trust. If you have questions about making a living trust, The Living Trust Advisor: Everything You Need to Know About Your Living Trust is a practical guide with the information you need.
If You Have Concerns About Making a Living Trust
If you want to make a living trust but have concerns about what happens to your property afterwards, contact your lawyer to discuss this issue. Rather than delay making an estate plan, communicate with your attorney openly about issues that make you hesitant to move forward. The stumbling blocks that arise when making a living trust are often the result of simple misunderstandings or insufficient information. An attorney can answer your questions about living trusts and ensure you are comfortable with any documents included in your estate plan. See our Free Guide to Living Trusts for more information.
. The author provides a clear explanation of how living trusts work and addresses the most common concerns people have about transferring property to a living trust. For example, if you want to know whether you will still own your house if you make a living trust, this guide provides answers to those types of questions.