What's In My Refrigerator?
Living Trust is the term most often used to refer to a revocable trust. This is the document that is created and funded to avoid probate. A living trust is a written legal document established during the estate holder's lifetime. A trust identifies who created the trust (the settlor) and the assets that will be held in the trust (corpus), the person responsible for managing and administering the trust assets (the trustee), the purpose of the trust and the manner and conditions under which distribution of the trust assets may be made.
Thinking about your living trust document as a "refrigerator" is a simple way to visualize the document as a container to hold whatever you put in or take out of it during your lifetime. As a refrigerator will preserve those things, so will your trust document. In order for your refrigerator to operate at its optimal level food must be placed in it. So is it with your trust, after it is executed, assets have to be placed in your trust by entitling them in the name of the trust, which indicates they are now held in the trust. You fund your trust with your assets the same way you fill your refrigerator with food, by placing items in it.
Your assets will change during the course of your lifetime as you purchase or sell real property, financial assets or open and close bank accounts. You will continue to change the contents of the "refrigerator" adding and removing items throughout your lifetime. What exists in your trust at the end of your life are the assets your successor trustee will take control over.
The distinction of a living trust is that you retain control and flexibility over how the assets in the trust are managed and distributed. The settlor retains ownership and control of the assets placed into trust. The settlor has the right to withdraw, invest or distribute the money at any time. At the death of the settlor, the trustee controls and administers the assets of the trust for the benefit of the beneficiaries. Not only does a trust provide instructions on what will happen to your assets when you die, it also includes provisions which control what will happen in the event that you become physically or mentally incapacitated while you are alive. Trusts can be established for a wide variety of beneficial purposes such as to provide for your needs or the special needs of a child or disabled family member.
Jones Torru Law Offices invite you to contact our office to schedule a consultation where we can discuss how a Living Trust would work for you and your family.