WHAT IS A LIVING TRUST? WHAT ARE THE ADVANTAGES?

A “Living Trust” is a written contract with 3 parties: “Trustors”, “Trustees” and “Beneficiaries.”

The Trustors place certain property in the Trust (known as “Trust Estate” or “Trust Corpus.”)

The Trustees are the LEGAL OWNERS of the Trust Estate and the named Beneficiaries are the BENEFICIAL OWNERS of the Trust Estate.  Often the Trustors also serve as Trustees until death or incapacity.  This means that while the Trustors are living, there really is no difference in the day to day management of the assets in the Trust Estate.   Under the terms of the Trust Agreement, the Successor Trustees assume responsibility upon the death or incapacity of the Trustors.

The Trustors instruct the Trustees in the Trust Agreement how to manage the Trust Estate, including when the Trust Estate is to be distributed to the Beneficiaries.  A Living Trust can be very flexible in handling trust property.

As a Living Trust, the trust is revocable which generally means the Trustors can amend or revoke the Trust Agreement while both are living and competent. There are other kinds of trusts known as irrevocable trusts (usually set up for tax or other special purposes) which cannot be amended or revoked. A Trust is confidential- no court proceedings and no information in the public records other than the title on the deed for any real property.

Purchases and sales of real estate through a Living Trust are much simpler and less expensive than through a Probate process.