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Jasper L. Edwards
A living
trust is legal written document that partly
substitutes for a will. The person's assets are put into a trust and administered for their
benefit. This is done throughout the course their life and transferred to their beneficiaries once
they pass on. Most people tend to appoint themselves as "trustee in-charge" of their
Trust's assets. This means that even though their assets have been placed into Trust, they
still remain in control as long as they are alive. However, this is not always the case. A
person may also choose to name a successor trustee who will look after the Trust’s assets if
they are unable or unwilling to do it themselves. The Trustee may be an individual or
institution.
Your Living
Trust agreement provides for the following
parameters:
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Gives the appointed Trustee
a legal right to control and manage the Assets contained in the Trust.It states
that Trustee should look after Trust’s assets for your benefit throughout the
course of your life.
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It contains the names of
the beneficiaries. They could be individuals or charitable
organizations.
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The agreement provides the
Trustee with the necessary guidance, authority and powers to distribute the
Trust’s assets. They are considered to be a Fiduciary, which means that he or she
has a position of trust and confidence. As a result, they are subject to high
standards and strict responsibilities. For instance, a Trustee cannot use the
Trust's assets in an unscrupulous manner or for their own benefit without explicit
permission. In fact, the Trustee must hold and use the Trust's Assets only for the
good of the beneficiaries.
Just as with a Living
Will, a Living Trust helps to ensure
that all your assets are managed according to your wishes even if you are unable to do it
yourself. Initially, you may serve as your own Trustee, but as time goes by, you will need to
choose a successor. After your death, he or she will gather your assets, pay debts, claims or
taxes and then distribute your estate in accordance with your wishes. The Trustee is quite
similar to the Executor of a will. The only difference is that a Trustee can do all these
things without the approval or supervision of the courts.
A Living Trust is a crucial component
of estate planning. It should not be taken lightly. People with vast estates should have a
Living Trust to avoid any future conflicts within the family.
You may also be interested
in:
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Do I Need a Living
Will?
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