People about to engage in estate planning may have been told that creating a trust is the right to protect one’s estate from probate and also ensure one’s legacy lives on. However, what many don’t realize is that there are different types of trusts that can be created for different purposes. Simply creating a trust is not enough to protect one’s assets-one must be sure of what he or she wants to achieve. An experienced trust and probate litigation attorney can discuss relevant options with them.
Those who wish to avoid probate while continuing to enjoy one’s property may want to create a revocable living trust. In this instrument, the maker of the trust is also the trustee and the beneficiary. The person who creates the trust, legally called the settlor, funds the trust. The trustee manages it, and the beneficiary benefits from it. All this, and often more, is outlined in the trust agreement.
Once the trust agreement is completed, the maker transfers ownership of all the property to the trust. This means the trust will become the beneficiary of retirement accounts, annuities and life insurance policies. Trusts can also hold real estate. The trust maker will manage the property for his or her own benefit, as the beneficiary.
A revocable living trust does not die with the trust-maker’s death. It lives on as a separate legal entity. The successor trustee will take over the relevant duties after he or she dies and performs them without the court’s involvement, since the estate did not go through probate. However, if certain property was not transferred into the trust, then probate is not avoided altogether. This is why it can be beneficial to update one’s estate planning documents regularly.