Trusts & Living Trusts
Lets discuss a living trust. A Living trust is a trust that goes into effect while the grantor is alive. (the grantor, once again, is the person who puts his or her property into the trust.) Often, a living trust is used as a form of estate planning - that is, as a way to manage property during the lifetime of the grantor and to provide for what will happen to any property that is left after the grantor’s death. Sometimes this is a good idea; sometimes it is a bad idea.
here is an example: Using the fictitious characters Karie, Kim and Ellen, lets look at a living trust. Karie creates a trust naming herself as trustee with Ellen as a successor trustee (to become trustee when Karie dies). Karie also names herself as beneficiary and names Kim as secondary beneficiary. She takes the legal steps necessary to transfer ownership of her property to the trust. During Karie’s lifetime, she uses the property in trust as she pleases. After her death, whatever is left is disposed of according to the terms of the trust instrument. The trust instrument says that when Karie dies the successor trustee is to manage the property held in trust for Kim’s benefit until Kim reaches the age of 30, and then to transfer all trust property to Kim. No probabte or other court proceeding should be required to transfer trust property after Karie’s death.