A living trust can be a good alternative to a last will as a vehicle of asset transfer if your estate situation is not particularly complicated. When a will is used, there is a delay with regard to the distribution of inheritances, because the will must be admitted to probate. This process will take close to a year, even if the case is relatively straightforward.
On the other hand, assets in a living trust can be distributed outside of probate. This is one benefit, but there are others.
Funding a Living Trust
When you fund a living trust, you convey assets into it. The trust becomes the owner of the property, and you are no longer in direct personal possession of the property. However, you do not have to be concerned about this arrangement, because you would control the actions of the trust.
You could act as the trustee and the beneficiary while you are alive and well, and you would have the power of revocation. If you ever chose to do so, you could dissolve the trust entirely and take back direct personal possession of the property that you conveyed into it.
To get into the specifics, when you fund the trust, you change the ownership registration on the title or deed of property that you are conveying into the vehicle. You make the trust the owner of the property, but you would be the trustee, so you would control the property.
When you establish a living trust, you create a trust declaration. You could list the property that you are conveying into the trust in this declaration, or you could list the property on a separate document called a schedule.
We should point out the fact that the matter of funding is not closed after you initially establish the trust. At any time, you can convey additional property into your living trust.
While we are on the subject of funding, we should point out the value of a pour-over will as an accompanying document. For various different reasons, you may neglect to convey certain property into the trust. A pour-over will would allow the living trust to absorb assets that were in your direct personal possession at the time of your passing.
Learn More About Living Trusts
The more you learn about living trusts, the more appealing they may sound. You should certainly gain a full understanding of the value of living trusts, especially if you have always thought that you should use a last will as the centerpiece of your estate plan.
If you would like to obtain more detailed information, download our special report. The report is free, and you can click the following link to access your copy: Special Report on Living Trusts.
Mr. Nirenstein is licensed to practice before the courts of the State of Connecticut and the United States District Court. He is a member of the Connecticut and Hartford County Bar Associations, and the Estate and Probate, Elder Law, Business Law and Real Estate Sections of the Connecticut Bar Association.
- What Are the Responsibilities of the Probate Court? - May 10, 2022
- Is Charitable Giving Part of Your Estate Plan? - April 26, 2022
- How Does a Pet Trust Work? - April 19, 2022
