HOW A LIVING TRUST WORKS

When you form a living trust, you are called “the Grantor”.  The person who manages the trust, is called the “Trustee”.  Generally, you will appoint yourself as your own “Trustee” for your trust while you are alive and competent.  You are in complete control of your assets and property since you are the Trustee of your own trust.  

You living trust begins to function while you are alive when you place assets into your trust. This process is called “funding” your trust.  But placing assets inside your trust does not mean that you lose control over what you own.  Not at all.  As long as you are mentally competent, you are in control of all of your assets and can use the trust property however you see fit. And you can always revise, amend, or revoke the trust for any reason and at any time up until the day you die, or become incapacitated and unable to make decisions on your own. 

If you become mentally incapacitated, and unable to make decisions, the person that you appoint as your “Successor Trustee” steps in.  Your Successor Trustee then manages the trust property according to the instructions that you wrote in your trust, and for your use and benefit while you are alive but incapacitated. If you regain your mental capacity, you regain the authority to manage all of your property and assets inside of your living trust. 

When you pass away, that’s when the instructions you have given to your Successor Trustee become operable. Most importantly, your living trust can no longer be revised, amended, or revoked in any way by your Successor Trustee or anyone else after you die. And because property held in a living trust does not need to be probated, your Successor Trustee can immediately transfer the property that you designated in your trust to your beneficiaries. There is no Probate and no delays.

How do your beneficiaries receive your trust assets?  After you die, some paperwork is necessary to effectuate the transfer of the trust property to your beneficiaries; such as preparing new deeds and other ownership documents. Still these matters can normally be handled in no more than a few weeks with little time spent by your lawyer. And once the trust property is properly transferred out of your trust to the beneficiaries, the trust ceases to exist.

Have any questions about how a trust can benefit you and your family?

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