When Sacramento residents are organizing financial assets, a concern that often arises is how the property will be allocated and whether a trust is a sound strategy. This is important for both the trustor and the beneficiary or beneficiaries. One tactic that is often used is an inter vivos trust, also known as a living trust. Before considering this option, it is imperative to have a grasp on what it entails.
This form of trust will let the trustor place the assets in a trust while still living. Many of these are revocable, which gives flexibility. The trust can be changed at any time. The property will be managed in the way the trustor wants. Oftentimes, the way it is managed is to provide benefit for the family members or anyone else. It is up to the individual. In many instances, the trustor will be the trustee as well. They frequently see that there is no difference between this and simply managing the property as they would without a living trust. They can do whatever they want with the property in spite of it being in the name of another.
This type of trust can avoid probate issues. Probate determines how property will be disposed of after death. With the trustee of the living trust owning the property, there will be no need to have probate. A living trust is growing more common, but there are issues with it. Many states have taken steps to reduce the common problems with probate and thereby reduce the need for a living trust. The size of the estate, the assets in the estate and the way in which the trustor would like to control the assets are keys to deciding whether or not to use a living trust.
Every situation is different. The positive aspects of a living trust will depend on what the trustor wants to do and how much control is desired with the property and financial assets.
Source: americanbar.org, "Living Trusts," accessed on Sept. 6, 2015