What is a Revocable Living Trust?
The American Bar Association (ABA) website states… “The term
‘living trust’ is generally used to describe a trust that
you create during your lifetime. A living trust can help you manage your
assets or protect you should you become ill, disabled or simply challenged
by the symptoms of aging.” It should be noted here that a “Revocable
Living Trust” is also known as a “Living Trust,” and
I will use the terms interchangeably.
The ABA website goes on to state that… “A ‘living trust’
is legally in existence during your lifetime, has a trustee who currently
serves, and owns property which (generally) you have transferred to it
during your lifetime. While you are living, the trustee (who may be you,
although a co-trustee might also be named along with you) is generally
responsible for managing the property as you direct for your benefit.
Upon your death, the trustee is generally directed to either distribute
the trust property to your beneficiaries, or to continue to hold it and
manage it for the benefit of your beneficiaries.”
Put more simply, as we often explain to our clients, a Living Trust is
like having a bucket with instructions slapped on it. You can put assets
in the bucket and take them out. The instructions state for whose benefit
the assets can be used and how they can be used if you become incapacitated
or die. You can change the instructions during your lifetime so long as
you have capacity to do so.
That being stated, there may be some bells and whistles that can provide
additional flexibility to the creator of the trust beyond what has been
reviewed thus far, but the foregoing general descriptions are a good starting
point for understanding the concept of what constitutes a Living Trust.
If you or anyone you know has any other questions regarding Living Trusts
or Wills, please don’t hesitate to reach out to us. We are happy
to be a resource to you. We can be reached at (203) 651-5521.