A frequent estate plan question centers around the difference between wills and trusts. Understanding what a living trust is can help to determine whether this is a document of value to an individual or not.
The living trust can be used in place of a will. The assets of the person who takes out the trust -- properties, bank accounts, etc. -- will be placed in the trust and administered to that person's benefit while he or she is alive. When the person dies, these assets will transfer to the beneficiaries of the trust. Most people will name themselves as the trustee to manage its assets. This is useful to maintain control. There is also the alternative of naming a successor trustee. This can be an individual or an institution who will oversee the assets if the person cannot or does not want to oversee it themselves.
This type of trust is revocable. As long as the person is competent, it can be altered or revoked whenever the person chooses to do so and for any reason. The living trust will do the following: it allows the trustee to manage and control the assets; it provides instructions for its management while the person is alive; it lists the beneficiaries who will receive the assets at the time of death; and it can be used as a guideline for the trustee to manage the assets in the trust. The trustee will be limited by responsibilities and standards. They cannot use the assets in the trust for his or her own benefit unless the person has given specific permission for it. The beneficiaries of the trust are of paramount importance.
Drafting estate planning documents can be complex and difficult. Those who are debating the value of wills, trusts or both can always use legal advice for all aspects of this planning. Speaking to an attorney who is experienced in a wide variety of matters related to estate planning and probate can help to formulate a plan and see it through.
Source: calbar.ca.gov, "What is a living trust?" accessed April 25, 2017