A lot of people who hear about the benefits of a revocable living trust are eager to create their own as soon as possible. But some have concerns that by creating a trust they will lose control over their property. After all, if a trust is a separate legal entity, won’t the trust itself become the new legal owner?
While it’s true that creating a revocable living trust requires you to create an entity that will end up owning most, if not all, of your property, you don’t have to worry about losing control. The practical reality of revocable living trusts is that they will allow you to maintain control over everything you own at all times. Let’s take a look at why this is true.
Trust Creation
In order to create a revocable living trust, you and your estate planning lawyer will have to sit down and discuss what you want to accomplish. You will also have to go over everything you own and create a plan that will allow you to transfer title of the property into the trust’s name.
Part of the trust creation process is creating a document in which you will state specific choices. One of the most important decisions you’ll have to make is your decision about who you want to serve as the trustee of your living trust. The trustee will have the legal responsibility to manage all of the property you place into the trust’s name.
Trustee Selection
Choosing the trustee is where most people who have concerns about losing control over trust property take a pause. Even though you will choose yourself as the beneficiary of your living trust, the trustee will have the obligation to manage the trust property. To most people, this seems like it would mean that you would lose control over the property you transferred into the trust because the trustee would have the ability to manage it.
This is absolutely true, but there is a significant caveat in that most people who create revocable living trusts choose themselves as the trustee. This means that you will create a trust, choose yourself as the trustee, and also choose to be the trust beneficiary. Because of this there will be no point during the trust creation process in which you lose control over any of your personal property.
Trust Management
Managing your living trust is not difficult. You already manage all of your personal property, and transferring the property into the trust’s name doesn’t require any significant changes. However, you will need to maintain excellent records and keep a little better track over the transactions you make with trust property. Nevertheless, creating a revocable living trust will not result in you losing any control over your personal property.
Our next free living trust seminar is October 10th. Visit our seminars page, or contact our office for more details.
