By setting up a living trust, you can avoid going through the courts and dealing with the probate process. Much like a will, a living trust will describe what happens to your assets in the event of your death. While you are alive, you remain in control of your assets and have the power to change the trust at any time.
A living trust (also called a revocable living trust) is a written legal agreement between a person setting up a trust and the institution or individual (known as the trustee) that has been designated to manage the trust and its assets. While they are alive and competent, the person setting up the trust (known as the trustor, settlor, or grantor) can revoke or revise their trust at any time. Initially, a trustor may also elect to make themselves the trustee on the living trust until they are no longer able to fulfill the role.
Benefits of Appointing a Trustee:
- Upon your death, or should you be declared incompetent, your trustee can follow the directions laid out in your living trust. Your trustee can also gather and distribute your assets, as well as pay your debts and taxes for you.
- A probate court is prevented from intervening to supervise your living trust and its assets because you have already designated someone to manage your trust.
Role of the Trustee:
- The trustee legally has permission to control and oversee the assets in a trust.
- The trustee must follow the directions of the trustor as delineated in the trust agreement. Unless specified by the trustor, the trustee cannot use the trust or its assets for personal gain. A trustee is considered a fiduciary—someone in a position of trust who is placed under the highest possible standards to fulfill their responsibilities that are set out in a legal agreement.
- The trustee is responsible for making sure the beneficiaries named in a living trust are provided for—as designated in the trust—after the trustor passes away. Because trustees are not accountable to the courts, however, it is easier for a trustee to get away with not honoring a living trust agreement.
Choosing A Trustee:
Managing your living trust is an important responsibility, and it is important for you to feel that you can trust the person or organization that you've appointed to be your trustee. Your trustee will have considerable control over your trust, and they will not be accountable to a court for their actions. For example, if you and your trustee are residents of Emeryville and you pass away, your trustee can continue to oversee your trust rather than having the Superior Court of California, County of Alameda take over the supervision of your trust's assets. You will want to make sure that your appointed trustee has the experience, skills, and time to manage your affairs.
Who Can Be A Trustee:
- Your spouse
- Your adult children
- A bank appointed by the state of California
- A trust company appointed by the state of California
- Business associates or partners
Our estate planning lawyers at Sagaria Law, P.C. are pleased to offer you our legal expertise regarding living trusts. We can advise you on who would be the best person or organization that you can appoint as a trustee and help you draft your living trust documents.