The revocable living trust is an essential part of a comprehensive estate plan. A trust is simply an agreement that decides how to manage and distribute a person’s property during his or her lifetime and also upon death. A revocable living trust usually involves three set of parties: The settlor or grantor who provides the property to be placed in the trust; the trustee who holds title to the trust property and is responsible for managing the trust property according to the terms of the trust; and the beneficiaries who will receive the income and principal of the trust.
For example, a married couple (the settlors) may create a family trust in which they place their property into the trust, serve as trustees during their lifetime and as beneficiaries receive the income or principal from the trust during their lifetimes. Often, the trust will name the settlors’ children or a charity as the beneficiaries after the death of the settlors
This type of trust is “living” because it is created during the settlor’s lifetime and is “revocable” because the settlor reserves the right to change or revoke the trust during his or her lifetime
Revocable living trusts are attractive because property held in the trust at the time of the settlor’s death is not subject to probate. This reduces the fees associated with probate and avoids the publicity, delay and court oversight that comes with probate administration.
Note however that a revocable living trust is not a substitute for a will. A “pour over” will naming the trust as the beneficiary of any property not held in the trust at death should always accompany the revocable living trust. In addition, a will is necessary if there are minor children for whom the settlor wishes to nominate a guardian.
A revocable living trust should be a part of your estate plan. Call Hannam Law for a consultation today.
The preceding article is for information purposes only and is not intended to be legal advice. For help with a guardianship or conservatorship, please consult a Missouri probate attorney such as Hannam Law.