Upon seeing the word estate planning tool, what easily comes to mind is a last will and testament. Very basically, drafting wills are useful for transferring or distributing inheritance to the heirs of the deceased person. It enables the testator to transfer or to distribute estate assets to a surviving spouse, child, grandchild, or other family members. However, setting up a last will and testament has certain advantages and disadvantages. Experienced Tacoma estate planning attorneys can explain to you other estate planning documents that may apply to your circumstance. One of these is establishing trust, which shall be the focus of this article.
Under relevant trusts law, if you decide to set up a trust, you can determine how the property in trust shall be managed when you die. Under this estate plan, any bank account, personal property, real property, or investment held in trust is no longer owned by the grantor but owned by the trust. Estate assets are essentially placed in the name of the trust. The grantor is to appoint a specific trustee who will be managing and administering assets. The trustee in a trust you set up can be a loved one, a bank, or a trust company. In certain instances, grantors themselves could be appointed as trustees.
When successor trustees take over a revocable living trust
If you are acting as the initial trustee, you are to manage, invest, and distribute assets in a trust account only until the successor trustee you have named steps into the picture, usually under the following scenarios:
Before you pass away, a time might come when you can no longer make decisions on your own and manage, invest, or handle day-to-day tasks associated with trust property. If a trustworthy successor trustee has been assigned and is familiar with trust instructions, the said person or entity can step in and continue to manage and invest the trust without the need for court involvement. The good thing, however, is that trust rules allow you to simply be a beneficiary of the trust after you step down.
When you die
Since a deceased person can, obviously, no longer manage, invest, or distribute trust property, his or her successor trustee will be the one in charge of managing, investing, and using property held in trust for the beneficiaries of the trust. Under relevant trust law, the successor trustee that you included in a trust while you are still alive will be able to carry out the wishes of the decedent without the need to go to court.
At a time you prefer
An individual may be very keen when creating a trust but has very little knowledge about managing assets in the name of the trust. Some, meanwhile, would realize that it is not a thing they’re good at, after being the initial trustee for a certain period of time. If you no longer want to be in charge of managing, investing, and transferring property in a trust, you may opt to resign and your successor will step in. Hands-on Tacoma estate planning attorneys can explain this in great detail.
Other things to consider
As specified in relevant state law, another option you might want to consider is naming your successor trustee as co-trustee. Doing so will allow you to see how your successor trustee will manage assets in a trust account when you are deceased. Additionally, if your trust documents will allow it, you may fire your successor and appoint a new one. The idea is that your successor trustee has a fiduciary duty to manage your assets for the benefit of trust beneficiaries.
The need for trusted Tacoma estate planning attorneys
Before you create a trust, contact an estate planning attorney from a law office that specializes in trusts and estates. A living trust is advantageous for your children, grandchildren, or any trust beneficiary, particularly in avoiding probate. If a decedent established a trust, the assets of the deceased will no longer be brought to court and probated after death.
For the perspective of the one who creates a trust, it will be good to know that income from trust assets, though taxable, is yours throughout the remainder of your lifetime. Until you are actually deceased, none is transferred to any beneficiary of a trust who you decided to appoint, be it a surviving spouse or would-be heirs. Additionally, if you opted for revocable trusts, legal documents involved can be amended or revoked and you keep control over trust property.
The different types of trusts can be quite confusing. For questions on a revocable or irrevocable living trust, credit shelter trust, succession, or probate and estate taxes, contact our law firm. Call us at James A. Jones Attorney At Law and consult our Tacoma real estate attorneys for reliable estate planning services.