The use of a Living Trust is another approach used in planning an estate. The Living Trust contains all the directions for management of assets during the Trustor’s (the person setting up the trust) lifetime and for distribution of assets upon the death of the Trustor. Living Trusts are very popular in states with onerous probate procedures. The Living Trust will manage your assets during your life and administer the distribution of your assets after your death. If a Living Trust is used, the titles on most assets (stocks, bonds, real estate, etc.) are changed from the Trustor’s name to the name of the Trust.
Generally, these Trusts have the same person(s) act as Trustor, Trustee and Beneficiary. The Trustor retains complete control of the assets, and all Trust accounts carry the Social Security Number of the Trustor. If everything is properly titled, the Trustor will have no assets in his or her name upon death, so the probate process is avoided. Whoever is named as the Successor Trustee will immediately gain control of the Trust assets and will administer them according to the directions in the Trust document.
Living Trusts are particularly useful when our clients own houses or land in different states.