Trust

Revocable Living Trust

     A Revocable living Trust is a legal document, much like a will, containing instructions as to who you want to handle your financial affairs and to whom your property will be distributed in the event of your incapacity or death. The Trust is “Revocable,” meaning you can cancel it or change its terms at anytime during your life. The Trust is called “Living” Trust, since it goes into effect even before your death and while you are still living. Finally, it is called a “Trust” because your assets are entrusted with a person called Trustee, who manages the assets during your lifetime and distributes it to your beneficiaries after your death.

     The person who creates the Trust and puts his or her assets into the Trust is called the Grantor. One who manages the assets in the trust is called the Trustee. The person who receives any Trust property or other benefits from the Trust is called the Beneficiary. The great marvel of a Living Trust is that you could be the Grantor, Trustee, and Beneficiary, all at the same time, during you lifetime.

     In other words, after you place all your property in your Trust, you could then manage the Revocable Living Trust and use that property for your own living needs and benefit, much like how you deal with your property before creation of any Trust. Therefore, even though you transfer legal ownership of your property to the Trust, you still maintain complete control over your property. During your lifetime, you could use, spend, sell, lease, give away, or do anything else that you like with the property in the Trust. Even the Internal Revenue Service acts as though there is no change and requires that you continue to file tax returns and report the Trust property under your own social security number, as though there was no transfer to a Trust.

Advantages of a Revocable Living Trust

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