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Living or Revocable Trusts
Date: Mar 28
When speaking to most clients about estate planning, many people have no idea what they want. They think the term just means drafting a will or designating a beneficiary on a life insurance policy. When I mention a trust as an option, most have no idea what the term means. Therefore, I want to explain what a trust is, what it can do, and who should be looking to draft one.
First off, anyone can use a trust. This estate planning tool is not exclusively reserved for wealthy people or people with large families or people with blended families. Whether or not a trust is right for you all depends on your own specific goals.
Among the many reasons for having a trust, the most common goals are, controlling how and when your assets are distributed after you die, avoiding a very public probate court, asset protection, and saving your heirs time and money.
A revocable or living trust is created during the lifetime of the grantor, who entrusts his or her property to the trustee. The trust is a contract that gives legal title of the grantor's property to a trustee. The trustee is a fiduciary for the property and the beneficiaries named in the trust. Most times the grantor(s), are the initial trustee(s). After the initial trustee or trustees have died or can no longer perform trustee duties, the trust will name a successor trustee to take over the fiduciary duty. The actual trust document gives the successor trustee instructions on how to distribute, invest or hold the property for the beneficiaries. The instructions in the trust given by the grantors directs the trustee on how to administer or maintain the trust. The trustee has a legal obligation to follow the terms and conditions left in the trust. If the trustee does not administer the trust properly, the trustee can be held liable for issues that occur.
Once the trust has been drafted, it must be funded. A trust document that has not been funded is worthless. To complete the process of creating a trust the grantors must transfer or deed their assets and property over to the trust. To do this, grantors physically change the title of your assets from their name to the name of the trust.
Hopefully now you will know a bit more about another option when it comes to estate planning. If you have any questions it is important to speak to a qualified Kansas estate planning attorney
before trying to create anything on your own.
by Cole Bailey J.D.