A Living Trust is a legal form devised and drafted to transfer a person’s assets to designated beneficiaries when that person dies. Living Trusts are well-known estate planning devices for families. A Living Trust is designed especially for the survivors to avoid probate. Download free Living Trust forms online fast.
After the person dies, the trust allows a person’s assets to be transferred without delay. Most of the time, disbursement of assets lasts no more than a few weeks and can save the family money and time.
Living Trusts are also known as Inter Vivos Trusts and there are two types: Revocable Living Trusts and Irrevocable Living Trusts. The distinction between the two being that a Revocable Living Trust can be changed and an Irrevocable Living Trust cannot be changed.
How does a Living Trust work?
The Grantor, or person creating the trust, transfers any of his or her assets to a Living Trust while he or she is still alive. The Living Trust now becomes the owner of the property.
This person who created the trust is now the Grantor, Successor Trustee and Beneficiary of the Living Trust and still retains control of all property placed in the trust. These assets include real property, vehicles, banking accounts, stocks, bonds and more.
A Living Trust may be amended in any way prior to the Grantor’s death. In the event the Grantor wants to cancel or revoke the Living Trust, he or she can at any time. This is why a Living Trust is also sometimes called a Revocable Living Trust.
When the Grantor passes away, the Living Trust becomes irrevocable. This means that the document cannot be changed in any way and the named Successor Trustee in the trust assumes management of the Living Trust.
The Successor Trustee will now commence the distribution of all the assets that were placed in the Living Trust by the Grantor to all of the Beneficiaries that were named in the trust. Once the assets have been distributed, the Living Trust is then dissolved.
Advantages of a Living Trust
A Living Trust offers your beneficiaries many advantages, especially when compared to a Will. The advantages of Living Trusts include the following:
- A Living Trust can be written without having to hire a lawyer
- With a Living Trust, your beneficiaries can avoid the probate process, saving time and money
- A Living Trust is easy to draft, can be written quickly and can be changed any time
- A Living Trust may help reduce estate taxes in some instances
- Unlike Wills, Living Trusts are private documents that cannot be viewed by the public
- If the Grantor becomes incapacitated, a Living Trust helps take care of your affairs
- A Living Trust gives your beneficiaries a transparent account of your wishes upon death and can help avoid family conflict
- Living Trusts are legal throughout the US and remain valid if you move to a different state from the one the trust was first drafted
That being said, drafting a Will is still highly recommended. There may be property that you have forgotten, neglected or acquired after creating your Living Trust.
Any assets left out of the trust will be subjected to probate. A Pour Over Will is helpful in these cases. Pour Over Wills are not probated and work by “pouring” any assets you own at death into your Living Trust.
Types of Living Trusts
There are two types of Living Trusts; Revocable Living Trusts and Irrevocable Living Trusts. The difference between the two is very straightforward.
The most popular type of Living Trust is a Revocable Living Trust. A Revocable Living Trust is fairly easy to draft and can be changed at any time. It can also be revoked and canceled whenever the Grantor decides.
An Irrevocable Living Trust, on the other hand, cannot be changed or revoked. Irrevocable Living Trusts contain lots of paperwork and are used mostly to avoid taxes. If you happen to go the Irrevocable Living Trust route, it is advisable to consult an attorney.
Free Living Trust Forms must be Notarized
Remember, for your free Living Trust forms to be valid, it must be signed and notarized in the presence of a Notary Public. In most states, you will need to take two forms of identification and your Living Trust documents.
First, the notary will observe you sign and date the documents. Then the notary will sign, date and stamp your Living Trust with the notarial seal. Your Living Trust will now be valid.