Living Trust Research Paper

856 Words2 Pages

Many times, when you think of a “trust,” you think only of ultra wealthy children dipping into their trust fund from their parents. This isn’t at all what a living trust is; however. It is instead a legal document that outlines your wishes with regard to your assets and the like. Read below to learn more:
What is a Living a Trust?
To answer most simply, a living trust is a legal document that allows you to explain exactly how you want your assets handled and who your heirs are and to name a trustee, who will fulfill the role of an executor upon your death. The living element of a living trust allows you to do all this while you are still living. The big benefit of a living trust is the fact that it allows your estate to bypass probate upon …show more content…

Before answering that, it’s a good idea to define a regular trust. A regular trust or testamentary trust is a trust that only goes into effect after a person’s death. The trust creator will name beneficiaries who will then be allowed access to assets and the like after the trustee’s death. Also, with a living trust, which is of course set up during a person’s lifetime, the person who sets up the trust is usually both the trustee (or the person who runs the trust) and the beneficiary (or the person who benefits from the trust property or assets). Of course, once the person who creates a living trust dies, it then transfers to the beneficiaries to …show more content…

It allows a person to give away their assets during their lifetime. These assets, once given, are no longer in the trust creator’s control. This means, the assets are no longer considered part of the trust creator’s estate. The benefit of this is the fact that because the assets are no longer part of the estate, they are no longer subject to estate taxes. Irrevocable trusts are rare, because it usually is only beneficial if a person has so much money, they could not hope to spend it all in one lifetime and they want to ensure their beneficiaries are not taxed at a high

More about Living Trust Research Paper

Open Document