People sometimes fail to act when it comes to estate planning, because they are not entirely certain about the long-term circumstances that will come about as time goes on. They do not want to get locked into decisions that they made on a given day, and this is understandable.
Most people are aware of the fact that they could create a new will if they decide to use a last will as an asset transfer vehicle. For this reason, they are reluctant to consider trust creation, because they are under the impression that you cannot change the terms of a living trust after it has been created.
In fact, this is not the case. To explain the anatomy of a living trust, there is a trustee who administers the trust, and there are living trust beneficiaries who can receive monetary distributions from the trust. If you were to create a revocable living trust, you can act as the trustee and the beneficiary while you are alive.
When you create the trust declaration, you name a successor trustee to handle the trust administration tasks after you are gone, and you name successor living trust beneficiaries. In this declaration, you can leave behind specific instructions with regard to the way that you want the assets to be distributed. You do not have to allow for immediate lump sum distributions after you pass away.
The specifics of the trust declaration can be altered at any time. You could make minor changes through the addition of an amendment, and for bigger changes, you could create a restatement of trust.
It would be possible to change the living trust beneficiaries through a restatement of the trust. This is not an exercise in starting all over; the date of creation would remain the same, but you would simply be restating some of the terms.
We should also point out the fact that you can change the successor trustee designation, you can remove property from the trust while you are living, and you can add property after you establish the trust. Since the trust is revocable, you can choose to dissolve it entirely if you ever decide to go that route, so the control that you retain is absolute.
Free Report on Revocable Living Trusts
You should understand all the facts when you are making estate planning decisions. People often harbor misconceptions about living trusts, and they turn away from an estate planning solution that may be ideal for them.
If you would like to learn more about the value of revocable living trusts, we have prepared a comprehensive special report that will certainly open your eyes. This report is free, and you can obtain easy access to your copy through this page: Free Report on Revocable Living Trusts.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
Latest posts by Paul A. Kraft, Estate Planning Attorney (see all)
- If a Beneficiary Dies During Probate What Happens to the Inheritance? - September 18, 2019
- Is Your Power of Attorney Powerless? What to Do When a Third Party Won’t Honor an Agent’s Authority - September 11, 2019
- Are There Different Types of Special Needs Trusts? - September 4, 2019