The Revocable Living Trust
Commonly Used Trust Terms
The terms “Revocable Living Trust”, “Living Trust” and “Trust” are often used interchangeably. A Revocable Living Trust is like a separate legal entity (for example, an LLC or corporation). The person who sets up the Revocable Living Trust is often called the “Settlor,” “Grantor” or “Trustor.” The “Trustee” manages the assets you transfer to the Revocable Living Trust for your benefit while you are alive and for those beneficiaries you name after your death. Most of the time, you name yourself as your own Trustee of your Revocable Living Trust.
Benefits of a Trust
Since trusts usually avoid probate, your beneficiaries may gain access to these assets more quickly than they might to assets that are transferred using a will. Additionally, if it is an irrevocable trust, it may not be considered part of the taxable estate, so fewer taxes may be due upon your death.
Assets in a trust may also be able to pass outside of probate, saving time, court fees, and potentially reducing estate taxes as well.
Other benefits of trusts include:
- Control of your wealth. You can specify the terms of a trust precisely, controlling when and to whom distributions may be made. You may also, for example, set up a revocable trust so that the trust assets remain accessible to you during your lifetime while designating to whom the remaining assets will pass thereafter, even when there are complex situations such as children from more than one marriage.
- Protection of your legacy. A properly constructed trust can help protect your estate from your heirs’ creditors or from beneficiaries who may not be adept at money management.
- Privacy and probate savings. Probate is a matter of public record; a trust may allow assets to pass outside of probate and remain private, in addition to possibly reducing the amount lost to court fees and taxes in the process.
Experienced Orange County Trust Attorney
Each Orange County estate planning attorney at Modern Wealth Law focuses exclusively in the area of estate planning. Modern Wealth Law attorneys prepare customized trusts and other estate planning documents for clients with a wide range of backgrounds, assets and goals. To that end, Modern Wealth Law believes in drafting trusts that you can understand. We will explain the complexities of the estate and gift tax laws and provide you with explanations and instructions to assist you in the continued management of your trust. In short, Modern Wealth Law has the experience and expertise to craft trusts of all levels of sophistication without being cost-prohibitive.
If you are interested in preparing a trust for yourself or a loved one, contact our offices at Modern Wealth Law.