Basic Facts To Understand The Benefits Of Having A Living Trust

The living trust is a legal decision where in you can transfer your properties and assets to another person, most possibly your heirs

. The purpose is partly to avoid probate in case of your death. You should know that since this is called a living trust, it follows that this is executed while you are still alive.

Three persons are involved in the living trust. These are the settlor, the trustee and the beneficiary. The settlor is also called trustor and this is the person who sets up the trust. The trustee is the person who is tasked to control the trust. The third person is the beneficiary who will receive the assets and the benefits.

It is also allowed that the settlor, trustee and the beneficiary are all the same and one person. Thus, you can be the person to establish the trust for your asset and you can control the same assets so that you will be designated as the beneficiary of the properties and assets. If you are already married, you and your wife are co-trustees of the trust for the conjugal properties.

The living part states that the trust is in force while the settlor is still alive and this is very different from the trust that that is established upon the death of the property owner. The settlor as he is still alive has complete control over the trust and the property. As such, he can revoke whatever he has set up. Because of the possibility of changing the arrangement in the trust, this is called a revocable living trust. But if you do not want to make changes in your trust, you can set your arrangement to be an irrevocable kind.

In setting up the living trust, you should include the arrangement in the event the trustee dies. You also have to stipulate the right distribution of the assets to the heirs. This is important because the trust should be controlled and continued; that the execution of the living trust is pursued even after your demise.

Many people are apprehensive in making a living trust because they have the belief that they are already giving away their properties when they are still alive and have a need for them. They have the misconception that the assets will no longer be legally owned by them. This is a mistake because the management can continue to remain in their control; they can assign themselves as the living trust executors or trustees.

If you set up these properties into a living trust while you are still alive, your assets covered by the living trust will be awarded to your beneficiaries outside of probate. This will save a lot of expenses on the part of your heirs.

by: John Smithes

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