probateA Living Trust is a written legal document that partially substitutes for a will. With a living trust, your assets (your home, bank accounts and stocks, for example) are put into the trust, administered for your benefit during your lifetime, and then transferred to your beneficiaries when you die.

Most people name themselves as the trustee in charge of managing their trust’s assets. This way, even though your assets have been put into the trust, you can remain in control of your assets during your lifetime. You can also name a successor trustee (a person or an institution) who will manage the trust’s assets if you ever become unable or unwilling to do so yourself.

The living trust described in this pamphlet is a revocable living trust (sometimes referred to as a revocable inter vivos trust or a grantor trust). Such a trust may be amended or revoked at any time by the person or persons who created it (commonly known as the trustor(s), grantor(s) or settlor(s)) as long as he, she, or they are still competent.

Your living trust agreement:

  • Gives the trustee the legal right to manage and control the assets held in your trust.
  • Instructs the trustee to manage the trust’s assets for your benefit during your lifetime.
  • Names the beneficiaries (persons or charitable organizations) who are to receive your trust’s assets when you die.
  • Gives guidance and certain powers and authority to the trustee to manage and distribute your trust’s assets. The trustee is a fiduciary, which means he or she holds a position of trust and confidence and is subject to strict responsibilities and very high standards. For example, the trustee cannot use your trust’s assets for his or her own personal use or benefit without your explicit permission. Instead, the trustee must hold and use trust assets solely for the benefit of the trust’s beneficiaries.

A living trust can be an important part  — and in many cases, the most important part — of your estate plan.

A living trust can help ensure that your assets will be managed according to your wishes-even if you become unable to manage them yourself.

In setting up your living trust, you may serve as its trustee initially or you may choose someone else to do so. You can name a trustee to take over the trust’s management for your benefit if you ever become unable or unwilling to manage it yourself. And at your death, the trustee-similar to the executor of a will-would then gather your assets, pay any debts, claims and taxes, and distribute your assets according to your instructions. Unlike a will, however, this can all be done without court supervision or approval.

Who needs a living trust?

Young married couples without significant assets and without children, who intend to leave their assets to each other when the first one of them dies do not need a living trust and would not benefit from having a living trust. Other persons who do not have significant assets and have very simple estate plans also do not need a living trust. Finally, anyone who wants court supervision over the administration of his or her estate should not have a living trust. The greater the value of your assets (particularly if you own real estate), the greater the need for a living trust. And having a living trust could be important in the event of an accident or sudden illness.

What is the benefit of having a Living Trust?

The assets held in your living trust could be managed by the trustee and distributed according to your directions without court supervision and involvement. This can save your heirs time and money. And because the trust would not be under the direct management of the probate court, your assets and their value (as well as your beneficiaries’ identities) would not become a public record. Your heirs and beneficiaries would still have to be notified about the living trust and advised, among other things, of their right to obtain a copy of the trust.

If your assets (those in your name alone) are not in a living trust when you die, they would be subject to probate. Probate is a court-supervised process for transferring assets to the beneficiaries listed in one’s will.

After your death, a petition would be filed with the court (usually by the person or institution named in your will as the executor). After notice is given, a hearing would be held. Then your will would be admitted to probate and an executor would be officially appointed. An inventory of your assets would be filed with the court and notice would be given to your creditors so they could file claims. The process would end once the court approved a final distribution of assets.

Probate can take more time to complete than the distribution of property held in a living trust. In addition, assets tied up in probate may not be as readily accessible to the beneficiaries as those held in a living trust. And the cost of a probate is often greater than the cost of managing and distributing comparable assets held in a living trust.

Axis Legal Counsel represents clients in numerous kind of Will, Trust, Estate, and Probate matters. Axis also represents clients in probate disputes, including estate / trust litigation, will contests, failures to diversify, or improper holding of assets, breaches of fiduciary duty, estate mismanagement, fraud, duress, undue influence, fraudulent / false / altered wills, beneficiary claims, improper trust administration, petitions to determine heirship, beneficiary rights, and numerous related matters.

For information on retaining Axis Legal Counsel to represent you with respect to a Wills, Trusts, Estate, or Probate matter contact info@axislegalca.com or call (213) 403-0130 for a confidential consultation.