Trust Administration

A Revocable Trust is a Living Trust created by written agreement between the person setting up the Trust (the Grantor or Settlor) and the person selected to manage the assets in the Trust (the Trustee). The Grantor may serve as the Trustee. The Grantor may revoke or change the Trust at any time and also may reserve the right to withdraw income and principal at any time. The terms of the Trust Agreement should be tailored to meet specific needs and objectives of the Grantor. If the Grantor becomes incapacitated, the Successor Trustee named in the Trust will assume control and management of Trust assets with virtually no difficulties. This permits the estate planning investments of the Grantor to remain intact with an easy transition to the designated successor. A Trust may designate beneficiaries to receive remaining assets upon the death of the Grantor outside of the formal probate process. By establishing separate revocable trusts which include essential language or by establishing a joint, family trust, a husband and wife may each obtain the maximum federal estate tax exemption.

A Revocable Living Trust will move with a Grantor to another State. If it was properly created under the laws of one State, the Trust will be valid and effective in another State. Unlike a durable power of attorney which becomes void upon the Grantor’s death, a Revocable Living Trust continues to be effective. Only the successor Trustee can continue to serve or take over and administer the Trust assets as specified in the Trust. If all of the Grantor’s assets were “titled” in the Trust, a probate of the Grantor’s estate may be avoided altogether. If the Grantor places title property in a foreign state into his or her Revocable Living Trust then such property can be distributed at the death of the Grantor without first going through probate there.

A Revocable Living Trust may also avoid a legal, court-controlled guardianship. In most instances, if a Grantor becomes incapacitated a guardian may have to be appointed by a Court to control and administer the Grantor’s property. The guardianship process is a lengthy and expensive procedure with costly, initial and continuing court costs and legal fees. Personal information about a Ward such as his or her handicaps, mental or medical condition and illness, and assets and liabilities become matters of public record. If properly drafted and fully funded, a Revocable Living Trust may enable a successor Trustee to care for the property of a Grantor without court supervision.

A Supplemental Needs Trust may be established as part of a Revocable Living Trust. A Supplemental Needs Trust is one which provides for a disabled person. The disabled person/beneficiary receives distributions to supplement any benefits he or she receives from governmental programs. The disabled person is not disqualified from receiving governmental benefits because of this Trust. By making a Supplemental Needs Trust a part of the beneficiary clause of a Revocable Trust, the disabled person may be provided for without the delays and costs of Probate.

Types of estate planning

A will is a legal document specifying how a person’s property and assets will be administered and distributed after death. A will can appoint a guardian of assets, can leave funds to a church, a charity, a community foundation or a private foundation, and can appoint a personal representative who will file your final income tax return and oversee the administration of the estate. Without a will, state law determines how property will be distributed and who will serve as personal representative. Properly created, a will may help minimize or eliminate federal estate taxes.