A Revocable Living Trust is the most widely used Trust of its type, since it can be amended at any point. Revocable Living Trusts allow the Trustmaker to allocate assets into the Trust, under the Trust’s name, which can then be invested, spent or inherited as the Trustmaker has designated. Either the Trustee, or a financial institution will manage the Trust to ensure these ends.
Over the course of their life, the Trustmaker’s Trust will undergo certain changes accordingly:
- Revocable Living Trust: Trustmaker is alive and healthy
- Revocable Living Trust: Trustmaker becomes incapacitated
- Revocable Living Trust: Trustmaker dies
Revocable Living Trusts: Trustmaker is Alive and Healthy
If the Trust Maker is alive and healthy (of sound mind) they will be allowed to make certain changes to the Trust, including adding and removing assets, as well investing or spending as they want. This means the Trustmaker will sign as Trustee to the Trust instead of as an individual.
Revocable Living Trusts: Trustmaker becomes Incapacitated
If the Trustmaker becomes incapacitated (is not of sound mind) then the designated Disability Trustee will step in take control over the Trust. This will allow the Trustee to make informed decisions to invest and spend the Trust’s assets and possibly even paying bills on behalf of the Trustmaker.
Revocable Living Trusts: Trustmaker passes-away
Following the death of the Trustmaker, the Successor Trustee will be appointed to administer the Trust on the Trustmaker’s behalf. This Trustee will have full Trustee privileges and will pay the final bills on behalf of the Trustmaker. The Trustee will also ensure the Trust is spent as outlined, ensuring all beneficiaries receive their inheritances as stipulated in the Trust agreement.
Creating Revocable Living Trusts require lots of planning to ensure all contingencies are met and the assets are funded and spent exactly as they ought to be. Contact your fiduciary advisor today to create your Revocable Living Trusts and ensure your assets remain in good hands.