Living Trusts: Key Terms to Know

Living Trusts: Key Terms to Know

When setting up a living trust, you’ll come across several important terms that form the foundation of your estate planning. Getting familiar with these terms can help you make informed decisions about protecting your assets and ensuring your wishes are honored.

The Grantor: The Person in Charge

The “Grantor” is the individual who creates the trust. This person—often you—transfers assets into the trust and sets the rules for how those assets should be managed and distributed. If you and your spouse create the trust together, you both share this role.

Your Estate: What’s Included

Your “estate” is everything you own, from your home and bank accounts to personal possessions and investments. When you set up a living trust, you’ll decide which parts of your estate you want to include in the trust. This process helps ensure your assets are managed according to your wishes.

Funding the Trust: Making It Official

Once you’ve established the trust, you’ll need to “fund” it. This involves transferring ownership of your chosen assets into the trust’s name. This step is crucial—without it, your trust won’t have anything to manage or distribute.

The Trustee: Who Manages Your Trust

The “Trustee” is the person or institution responsible for managing the trust’s assets according to the rules you’ve set. In most cases, you’ll serve as the trustee while you’re alive, retaining control over your assets. You’ll also name a “Successor Trustee,” who will take over management after you pass away or if you’re no longer able to do so.

Beneficiaries: Who Inherits Your Assets

“Beneficiaries” are the individuals or organizations that will receive the assets held in your trust after you pass away. These could be family members, friends, or charities. You decide who gets what and when, ensuring your estate is distributed according to your wishes.

Creating a living trust is a powerful way to manage your estate, avoid probate, and ensure your loved ones are taken care of. But understanding these terms is just the beginning. To navigate the complexities of estate planning and to create a trust that truly reflects your wishes, it’s wise to seek professional guidance.

At The Mendez Law Firm, we specialize in Estate Planning and can guide you through the process of creating a Family Estate Plan. Call us at (407) 380-7724 or Email Us TODAY at mail@themendezlawfirm.com. We’ll schedule your FREE, No Obligation, No Cost office conference or Virtual Zoom conference to discuss your Family Estate Plan and review other Probate avoidance and Asset Protection options that may benefit you and your family. If you are looking for a Florida estate planning attorney in the Greater Orlando area, we are here to help with all your Estate Planning and Asset Protection needs.