A “living trust” is the name frequently given to a revocable trust used in estate planning as an alternative to a will. The downside to a will is that for a will to be valid and effective to transfer property at one’s death, the will must be “probated.” Probate is a formal court proceeding that is expensive and often ties up the decedent’s estate for many months, while the beneficiaries wait for their inheritance. A “living” trust avoids probate. An individual can establish his/her own individual living trust, or spouses, if they wish, can establish one trust together called a “joint” living trust. Persons who establish a trust are called “settlors.” The trust document will state how the settlors want their trust property to be distributed upon their death and name the persons who will take over as trustees upon the settlors’ death (called “successor trustees”) and administer the trust and distribute the property to the beneficiaries that the settlors name. All of this happens without any court involvement. A trust is not probated through the courts but is privately handled by the successor trustees following the directions that the settlors provide in their trust document thereby avoiding the delays and expense of probate, resulting in a much more efficient, cost-effective, and speedy process to wind up the decedent’s final affairs and transfer property to the decedent’s beneficiaries. The name “living” trust is derived from the fact that living trusts are completely revocable and changeable so long as the settlors are living and have capacity. This means that the settlors can easily change their trust document as circumstances change during their lives, and in this sense, it is a “living” estate plan.
Should I gift $15,000 to my children annually as part of my estate plan? by Janell M. Sprinkle Death & Probate by: Kurt Bachman