I always think about that old Frankenstein movie when I think about living trusts (“It’s alive…..alive!”). Maybe it’s just my weird sense of humor…anyway I am talking about the Revocable Living Trust. What is this strange thing of which I speak? Well I am about to enlighten you…
Think of a trust as an invisible box that holds all of your property – your house, your car, your stocks…your cherished Elvis memorabilia. Anything you want to put in it. The probate court never gets to open that box. Never. The property held in the trust that was put there while you were alive goes directly to whomever you want it to go to. The box is created by a Declaration of Trust which names YOU as the trustee. This is a document that says “I am Bruce Wayne and this is all of my property and it will go to Dick Grayson upon my death.” Bruce is the Trustee in our story. The Trustee is in charge of the trust property. Bruce may transfer property in and out of the trust, name new and remove old beneficiaries, and revoke the trust completely while he is alive – hence the term Revocable Living Trust. When Bruce shuffles off this mortal coil, that mansion on the outskirts of Gotham City, Bruce’s vintage motorcycle collection and the Bat Cave all go straight to Dick. That is, if they were transfered into the trust before Bruce died.
It’s much more difficult to challenge a living trust than a will. If one challenges your will by arguing that you were crazy when you made it, the validity of the will is predicated on your sanity on the day that you signed it. Since a trust is managed by you over a period of time, it is harder for a challenger to prove that you were a whack job if you have successfully managed your trust for 10 years.
But pay attention Kats and Kittens – you still need a will. There are certain things a will does that a trust cannot – see a lawyer in YOUR state to ask about these things. A Pour-Over Will is often used in conjunction with a living trust. It simply takes whatever property that was not transferred into the trust before you died and “pours it over” into the trust.
So that’s the revocable living trust in a nutshell. I’ll leave you with this final piece of advice, as this advertising method works so well in all those commercials for prescription drugs: “Ask your lawyer if a Revocable Living Trust is right for you!”