Jerry Torres | WealthCrafters, Inc.<\/p>\n
A living trust is an arrangement created during your lifetime to hold and manage property under written instructions. It identifies who manages the property and who benefits from it. For a California homeowner, it can help answer a practical question: who will handle the assets covered by the trust if I cannot, and what should happen to them after my death?<\/p>\n
This guide develops the introductory topic in my What Is a Living Trust video<\/a>. You do not need to know every estate planning term before getting started. Understanding the people involved and the connection between the document and your property is a useful first step.<\/p>\n The person who creates a trust may be called the settlor, grantor, or trustor. The trustee manages the trust property. A beneficiary is someone entitled to benefit under its terms.<\/p>\n Those roles do not always require three different people. With a typical revocable living trust, you may create the trust, act as its trustee, and benefit from its property during your lifetime. The Alameda County Superior Court living trust guide<\/a> explains this common arrangement.<\/p>\n A successor trustee is the person named to take over when the trust calls for a change in management. When considering someone for that role, think beyond whether you like and trust them. Would they be willing to organize records, communicate with others, and follow instructions? Discuss the responsibility before assuming they would accept it.<\/p>\n The trust document supplies the instructions. Funding connects appropriate property to those instructions through the necessary ownership or transfer steps. Signing the document and funding the trust are related, but separate, parts of the work.<\/p>\n The Orange County Superior Court living trust guide<\/a> describes funding as transferring title to property into the trust after signing. For a home, ask how the recorded ownership and transfer documents will be reviewed. Do not assume that mentioning an address in a planning conversation establishes ownership in the trust.<\/p>\n You can begin with a simple worksheet. List the asset, how you understand it is owned, and the question you need answered. For example: \u201cFamily home; current ownership to be confirmed; what records show whether it is in the trust?\u201d Leave passwords and full account numbers out of preliminary notes.<\/p>\n For assets properly placed in the trust, a living trust generally allows distribution to the named beneficiaries without probate. The California Courts estate planning guide<\/a> emphasizes that the assets must have been put into the trust for this benefit to apply.<\/p>\n A living trust can also establish a way for a successor trustee to manage trust assets when you cannot manage them yourself. The document’s terms matter, including when that person’s authority begins. This lifetime management feature is described in the Consumer Financial Protection Bureau overview<\/a>.<\/p>\n Imagine a hypothetical homeowner, Elena, who usually handles the household’s financial paperwork. Her planning goal is for someone she chooses to be able to manage the trust’s property if she cannot. That goal gives her specific questions to ask: who is named, what activates the role, and where would that person find the necessary records?<\/p>\n A living trust does not make every planning decision disappear. It needs instructions that fit your wishes and property that has been addressed appropriately. A folder labeled \u201ctrust\u201d is a starting point for checking the details, not evidence that every future issue has been settled.<\/p>\nThe people named in a living trust<\/h2>\n
What the document and the property each do<\/h2>\n
How a living trust may help your family<\/h2>\n
What a trust does not finish for you<\/h2>\n