Q: What are the advantages of a Living Trust?
A: In addition to avoiding the costs and delays of probate administration, the living trust is a private proceeding so that there are few, if any, public records regarding the extent or nature of assets or the identity of the beneficiaries. The living trust has the added benefit of providing for the needs of the grantor during periods of disability.
Q: Can a Revocable Living Trust be Changed or Revoked?
A: Yes. The Grantor typically reserves the right to change, amend or revoke the trust agreement at any time during his or her lifetime, with the exception of any period of mental incapacity.
Q: How will I use my property if it’s tied up in Trust?
A: A revocable living trust permits the Trustee (you) to transfer property in and out of the trust at your discretion. Therefore, it is not tied up in trust. The better practice however, is to use the property through the authority of your position as “Trustee.” When opening a bank account, the account will typically be titled in the name of the Trust, for example “The John Doe Revocable Living Trust, Dated January 1, 19XX, John Doe, Trustee.” All checks would be signed by “John Doe, Trustee.” Other property is typically titled in a similar manner.
Q: Does the Revocable Living Trust avoid Probate?
A: Yes, insofar as it pertains to property actually transferred into the trust. Property not transferred into the trust is, obviously, not owned by or administered under the trust.
Property held in trust at the date of the Grantor’s death is not subject to Probate, but distributed under the terms of the Trust. This means that your beneficiaries will not incur the expenses associated with a probate proceeding as to any property owned by the Trust. This typically means saving thousands of dollars and your beneficiaries will receive their distribution much sooner than they would if the estate were probated.
Q: If I set up a Living Trust, do I still need to set up a Will?
A: Yes. Although, ideally, all your property would be transferred to your intended beneficiaries by your Trust, it is always possible that there will be some property that has not been placed in trust, for whatever reason. Therefor, it is important that you execute a “pour over” Will that names your revocable living trust as your principal beneficiary to assure that your property is distributed according to the terms of the trust.
Q: If I have a Living Trust, do I still need a Durable Power of Attorney?
A: Yes. The Durable Power of Attorney allows your attorney-in-fact to handle your affairs during periods of disability. It is quite likely that there may be property that has not been transferred into trust, or new income or property that may accrue you, personally, during a period of disability. For this reason, it is advisable to have a Durable Power of Attorney for management of property that is not within the trust.
For more information about revocable living trusts, please contact our office at (314)725-1880.
DISCLAIMER: THE PRECEDING INFORMATION WAS OF A GENERAL NATURE AND NOT MEANT TO CONSTITUTE LEGAL ADVICE OR TO BE USED IN, OR APPLIED TO, ANY INDIVIDUAL SITUATION. THIS GENERAL INFORMATION IS APPLICABLE TO THE STATE OF MISSOURI AND MAY NOT BE VALID UNDER THE LAWS OF OTHER STATES. IF THE READER HAS SPECIFIC LEGAL QUESTIONS, HE OR SHE SHOULD CONTACT AN ATTORNEY.