A trustee is a person or entity that administers a trust. If you utilize a revocable living trust as your asset transfer vehicle, you can act as the trustee while you are alive and well. You can also serve as the beneficiary, so you could receive monetary distributions from the trust throughout your life.
This arrangement is comforting to many people because you do not surrender control of assets that you convey into a revocable trust. You can also revoke the trust entirely if you ever decide that you want to call the whole thing off and take back possession of the assets that you conveyed into the trust.
You would be creating the trust as an estate planning tool, so you have to account for the things that will take place after you pass away. When you establish the trust declaration, you name a successor trustee to handle the business of the trust after you pass away. Successor beneficiaries would also be named in this document.
Living Trust Benefits
A revocable living trust can provide a host of benefits that would not be realized if you were to use a last will as your asset transfer vehicle. First off, assets in a living trust can be distributed outside of probate, so resources can typically get into the hands of the beneficiaries in a relatively timely manner.
Things are different when a will is used. The will must be admitted to probate, and the administration of the estate is subsequently supervised by the probate court. A very simple case may sometimes be probated in the vicinity of a year, but most cases will take 18 months to two years – complicated cases can take considerably longer.
There are those who think that a will is an economical choice because it costs more to create a living trust. In fact, there are innumerable expenses that present themselves during the probate process when a last will is used.
Avoiding probate is one major benefit, but you can also account for the possibility of latter life incapacitation if you create a living trust. The successor trustee could be empowered to administer the trust if you ever become unable to make sound financial decisions on your own.
Plus, through the inclusion of a spendthrift provision, there would be asset protection for the beneficiaries after your death.
Revocable Trust Trustee
When you think about the appointment of a successor trustee, you may automatically start to consider people that you know personally to assume the role. If you want to go this route, you could do so, but many people have certain concerns.
Longevity would be one of them, and geography is another factor. Plus, it may be logical to name someone who is a family member or a close friend of the family.
Under these circumstances, possible favoritism can enter the picture. There can be genuine biases, but short of this, certain family members could construe favoritism even if it is not really present.
In addition to these factors, you may not know anyone who is ready, willing, and able to administer a revocable trust.
You could go in a different direction when you are selecting a successor trustee. The trust departments of banks offer trust administration services, and there are also trust companies that will handle trust administration tasks.
If you go with a professional fiduciary, you gain a number of benefits. There would be no favoritism or conflicts of interest, and longevity would not be an issue. You could utilize a company with offices in your area, so geography would not be an obstacle, and this is another advantage.
Professional fiduciaries are beholden to certain regulations, so there is oversight on that score, and there is inherent organizational oversight within the institutions themselves.
There would also be a level of expertise. Assets that you have conveyed into the trust can be intelligently invested by a certified financial professional.
If you would like the trust to be able to earn income over an extended period of time, it would probably be a good idea to put the financial decision-making in the hands of an investment specialist.
Schedule a Consultation Today!
A living trust is the ideal estate plan centerpiece for a wide range of people, and we would be more than glad to help you establish one if you are ready to take action.
You can schedule a consultation at our Burbank, CA estate planning office if you call us at 818-937-2335, and you can use our contact form to send us a message.
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