For this reason, if you name yourself as trustee, you need to be sure that the trust agreement contains an appointment of a successor trustee in the event of your death. Unlike naming a personal representative in a will, there are no legal requirements for someone to serve as your trustee. As a result, you could name a friend or family member as your trustee. However, you want to be sure that they are someone you trust to handle your financial affairs. Friends and family members are often named as successor trustees when people name themselves as trustees.
That said, if you choose to name a friend or family member as a trustee, you should make sure that the trust agreement gives them the authority to hire professional assistance such as a lawyer or financial advisor to help with administering the trust. A Boca Raton living trust lawyer can help you choose the right person to serve as your trustee. The trustee manages the assets that are in the trust. Many grantors choose to be the trustee and continue to manage their affairs for as long as they are able.
Married couples are often co-trustees so that when one dies or becomes incapacitated, the surviving spouse can continue to handle their finances with no other actions or steps required, including court interference.
A successor trustee is named to step in and manage the trust when the trustee is no longer able to continue usually due to incapacity or death. Typically, several are named in succession in case one or more cannot act. Sometimes two or more adult children are named to act together. Sometimes a corporate trustee bank or trust company is named.
Sometimes it is a combination of the two. The beneficiaries are the persons or organizations who will receive the trust assets after the grantor dies. A trust is a legal entity that can own assets. There are different kinds of trusts: testamentary created in a will after someone dies ; irrevocable usually cannot be changed ; and revocable living trusts.
Today, many people use a revocable living trust in addition to a will in their estate plans because it avoids court interference at death probate and incapacity. It is also flexible. As long as the grantor is alive and competent, the grantor can change the trust document, add or remove assets, and even cancel it. For a living trust to work properly, the grantor must transfer assets into it. The grantor should make you familiar with the trust and its provisions.
You need to know where the trust document, trust assets, insurance policies medical, life, disability, long-term care , and other important papers are located. However, do not be offended if the grantor does not want to show you the values of the trust assets; some people are very private about their finances. This would be a good time to make sure appropriate titles and beneficiary designations have been changed to the trust.
Some assets, like annuities and individual retirement accounts, may list the trust as a contingent beneficiary. You also need to know who the trustees are, who successor trustees are, the order in which you are slated to act, and if you will be acting alone or with someone else.
The most important thing to remember when you step in as trustee is that these are not your assets. You are safeguarding them for others—for the grantor if living and for the beneficiaries, who will receive them after the grantor dies. As a trustee, you have certain responsibilities. For example, you must follow the instructions in the trust document:. No, of course not. You can have professionals help you, especially with accounting and investing.
You will also probably need to consult with an attorney from time to time. However, as trustee, you are ultimately responsible to the beneficiaries for prudent management of the trust assets. The trust may require one or more doctors to certify the grantor is not physically or mentally able to handle his or her financial affairs.
First, make sure the grantor is receiving quality care in a supportive environment. Living Wills. If you're concerned about how to protect your assets from nursing home costs, you're at an advantage if you can plan at least five years out. But there are other things you can do if a nursing home is in your immediate future, too. Estate Planning Basics. A competent and reliable successor trustee can help achieve your goals and provide continuity of management.
A living trust is one of the most flexible estate planning options available, but how do you go about writing one? Follow this checklist! Last Wills. Whether a living trust is better for you than a will depends on whether the additional options it provides are worth the cost.
A living trust can be an important part of your estate plan, but watch out for errors that could hamper your estate planning objectives or invalidate the trust. Living Trust: Trustor vs. Trustee by Edward A. Trustee Living Trust: Trustor vs. Trustee Are you thinking about setting up a living trust? Living Trust Basics A living trust is a legal tool for the management of one's assets both during a person's lifetime and upon death.
A trust involves three classifications of parties: Trustor: a person who establishes a trust, typically either an individual person or a married couple. A trustor may also be called a grantor or a settlor. Trustee: a person or persons designated by a trust document to hold and manage the property in the trust. Beneficiary: a person or entity for whom the trust was established, most often the trustor, a child or other relative of the trustor, or a charitable organization.
For example, if your family home is placed in the trust, the deed must be transferred to name the trust as the owner. Living trusts have several potential benefits for your estate and your beneficiaries. The main advantage is that a living trust bypasses the probate process upon the trust creator's death.
Probate is the court-guided process through which a deceased person's assets are distributed. With a living trust, the property passes automatically to the designated beneficiaries, which means they get them more quickly with no additional costs to the estate.
In some instances, then, a living trust can also help maximize the inheritance of beneficiaries. Another major benefit of a living trust is that, if you become incapacitated and can't manage your assets, a living trust allows you to choose the person who would take over your trust. For this eventuality, you should have an incapacity clause that sets the criteria that will define incapacity. The only true disadvantage to creating a trust is that it simply may not be necessary.
Because of up-front costs to create a trust, the expense of a living trust may not be justified in some situations. While you don't need a reason beyond simply wanting to arrange important assets in a living trust within your estate plan, in some instances, you should strongly consider a living trust.
If you have minor children or a loved one with special needs, for example, you can set up a trust to distribute income to children in a measured way or simply set aside money to care for your loved ones.
Perhaps you have acquired substantial real estate holdings and no longer care to manage them personally. Overall, a living trust allows you to distribute your assets according to your wishes without court intervention—and that may be reason enough for you.
Whether you have special life circumstances or simply want to make things easier on your loved ones after your death, a living trust may be a smart move. If you want to incorporate a living trust into your estate plan, you should consult with a legal professional to ensure that the document accomplishes exactly what you want it to do.
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