NTRODUCTION TO LIVING TRUSTS
Simply put, living trusts are an expedient way to transfer property at your death. A living trust is a legal
document that controls the transfer of property in the trust when you die.
Generally, living trusts are established during an individual’s lifetime and can be modified or changed
while that person is still alive. Circumstances do change and the option to make alterations in the trust is
important.
For this reason, a living trust is set up on a "revocable" basis. Revocable means you can modify or change
the trust’s provisions. Your other option would be to create an irrevocable trust. Once put in place, you are
unable to change the terms of the trust regardless of the circumstances.
As you will see, living trusts speed up the process by which your property moves to your designated
beneficiaries after you die. Today, and into the foreseeable future, this is vitally important as the United
States is experiencing an unprecedented wealth transfer.
It is estimated, according to "Fortune" magazine, that some $6.8 trillion worth of assets will soon pass
from parents to children, grandchildren, friends, charities and others. The questions remains: how will this
wealth be transferred? Will it be the traditional methods of wills and probate or the new revolution of
estate planning that has incorporated living trusts? Many legal experts believe that living trusts are the
future of wealth transfers.
The concept of living trusts has created controversy simply because the legal profession seems evenly
split on the issue. Estate planners seem to favor living trusts but there are enough opposed to the concept
to avoid a clear majority decision.
Living trusts are also called "inter vivos" trusts, a Latin term preferred by attorneys. The Internal Revenue
Service calls them "grantor" trusts. All mean the same thing.
