What is a Living
Property and assets are owned by many
types of legal entities -individuals, partnerships, corporations, and
trusts. A trust is a separate legal
entity that is established by a property owner to leave assets to his or her
beneficiaries. A trust is like a
contract between the property owner and the trustee. During your lifetime, you are the trustee, so
it is like you never parted with your assets.
The trust primarily helps you avoid probate and minimize the costs of
giving your assets to your loved ones.
There are many types of trusts: revocable living trusts, irrevocable
living trusts, charitable trusts, life insurance trusts, etc... The Revocable Living Trust is one of the most
popular and important estate planning document in use today.
With a Revocable Living Trust, you
transfer the title of any of your assets (usually a house) from yourself as an
individual, to yourself as Trustee of the Trust. Then you, as the Trustee of the Trust, manage
the assets of the Trust for the benefit of the beneficiary, which is you. In other words, you keep complete control
over the assets during your lifetime.
Once you pass on, a Successor Trustee takes over the management of the
assets for the benefit of the beneficiaries that you named in your Trust. Your assets do not have to pass through
Probate because the assets are no longer titled in your name as an individual. The Trust will then be administered by your
Successor Trustee who is legally bound to transfer your assets to your
beneficiaries. All this is done without
the need for probate which greatly reduces court time and attorney's fees and
The Trust helps you keep
complete control over your assets and ensure that your assets are passed to
your designated beneficiaries without undue delay or unnecessary costs. A Revocable Living Trust is most useful if
you have a home in order to avoid the 12 – 18 month delays of probate and the
high costs of probate which generally force your beneficiaries to sell the
house to pay for all the costs. With a
trust, the administration generally takes 6 – 8 months at a reduced cost
compared to probate.