The most popular trust is called a living trust. A person called the grantor, trustor or creator transfers assets to a trust that will be administered on behalf of a designated beneficiary by an appointed trustee. A living trust is a major legal instrument that is used in estate planning here in Texas and elsewhere to distribute assets of the grantor to trust beneficiaries, thus getting them out of the control and ownership of the grantor during his or her own lifetime.
Another major trust instrument is the testamentary trust. That is a trust that does not become effective during the maker’s lifetime; rather, it is set up to become effective upon the maker’s death. It is usually created in the terms of the person’s simple will, also called a last will and testament.
A living trust can be set up to be revocable. This means that the grantor can modify, change, revoke or terminate it during his or her lifetime as desired. Upon death, however, an existing living trust become irrevocable. The living revocable trust is used in estate planning for several purposes, one of which is to avoid probate and the public process of estate administration. The living trust is completely private and will not generally be subject to reporting requirements upon the grantor’s death or during his or her life.
Estate planning in Texas and everywhere else involves a process that the individual joins in with an estate planning attorney and sometimes also a financial planning expert. Through the process of identifying and evaluating all of the assets and investments that the person owns, the owner and his or her team of professionals can devise the most effective, cost-productive and personally-tailored framework for the transfer of one’s assets both during life and upon death. This is a fact-intensive process that will strive to bring to fruition the individual’s desires and intentions by effectively implementing available legal and financial planning options.
Source: The Jackson County Times-Journal: Columns & Blogs, “Law You Can Use: Is a revocable (“living”) trust right for you?”, Dec. 31, 2012