Living Trusts

A Living Trust (also known as a "revocable trust") is a trust created by a person (known as the "Grantor") for use during that person's lifetime. It provides for payments of income for the Grantor and the distribution of the remaining assets of the Trust upon the Grantor's death. The Living Trust also includes an option which allows the Grantor to amend or revoke the Trust at any time. In order to amend the Trust, the Grantor must deliver to the Trustee an appropriate written amendment or restatement, signed by the Grantor.

Typically, a Living Trust includes provisions that allow the Grantor, who often serves as initial Trustee, to manage the assets of the Trust until such time as the Grantor:

1. becomes "disabled" (unable to manage his or her financial affairs);
2. simply prefers to have someone else (perhaps a bank's trust department);
3. dies.

If that occurs, the Trust provides for a successor Trustee to take over the management of the Trust.

Payments

During the Grantor's lifetime, payments of the net income of the Trust are made to the Grantor at fixed intervals. The amount of the payments can be changed from time to time at the request of the Grantor.

When the Grantor dies, the Trust provisions designate the beneficiaries who will receive the Grantor's property, much in the same manner as a will. At the option of the Grantor, these provisions can include specific distributions and distributions of tangible personal property before the distributions of the remaining trust assets.The successor Trustee carries out these provisions in a role similar to that of an Executor. These provisions also allow the Grantor to include a trust share that will be maintained for the benefit of the Grantor's minor children through a trust for minor children.

Advantages of a Living Trust

The Living Trust is often viewed as a preferable alternative to the Will. Some of the perceived advantages of the Living Trust relate to privacy, reduced probate costs, and management of assets.

Note: In Texas and Wisconsin, exercise caution before designating the Grantor as the sole Trustee and the sole lifetime beneficiary. This because in those states, the trust may be considered "void" where all three interests -- grantor, trustee, and beneficiary -- "merge" and therefore the trust has no legal significance. Consult an attorney for advice.

Note: This trust is not appropriate for estates (including life insurance proceeds and retirement plans) which exceed the federal estate tax applicable exclusion amount of $1,000,000.

Living Trust Administration Worksheet	PDF*	MS Word
Living Trust	PDF*	MS Word
Joint Living Trust	PDF*	MS Word
Certification of Living Trust	PDF*	MS Word

* You need Adobe ® Reader ® to read PDF files, it is free.

Pour-Over Will

A Pour-Over Will is a specialized will that is used as a supplement document to the Living Trust or Joint Living Trust. Its primary function is to "Pour-Over" the Willmaker's remaining assets (at the Willmaker's death) into the Willmaker's Living Trust or Joint Living Trust. Often a Living Trust is established to avoid "probate" of a will, but if any assets were not transferred into the trust -- by design or by inadvertence, a pour-over will serves as a safety net to convey those assets into the Living Trust so that they can be distributed with the Willmaker's other assets. Note: If a Joint Living Trust has been created, each joint Grantor should prepare a Pour-Over Will.

A Pour-Over Will includes a standard provision that provides for an Executor (Personal Representative in some states). It also includes an optional provision to select a Guardian, if the Willmaker has minor children.

Instead of the usual provisions that provide for the distribution of specific bequests, tangible personal property, and the residuary estate, the Pour-Over Will simply distributes the Willmaker's remaining assets to his or her Living Trust. The Living Trust then distributes that property, plus the Trust assets, in accordance with the distribution provisions (specific bequests, etc.) of the Living Trust

The Pour-Over Will should be signed with the same formalities as any other Will.

Reasons to Create
• Own property to be distributed upon your death.
• Designate the persons or organizations that will receive your assets after your death.
• Designate the person who will carry out your wishes.
• A desire to use a living trust and a pour-over will instead of a will, perhaps for privacy reasons.
• A desire to have a system in place for the management of your assets if you become unable or unwilling to manage them yourself.

Before You Begin Information you may need:

• Name and address of the person who is creating the Trust.
• Name and address of the Trustee, the person or organization who will carry out the terms of the Trust.
• Name and address of the successor Trustee, the person or organization who will serve as trustee after the initial trustee is no longer able to serve.
• Information regarding any specific items which will be distributed to a named person or organization after your death.
• Names and addresses of the Beneficiaries, the persons or organizations who will receive the bulk of the assets of the Trust after your death.
• Information regarding the assets that will be placed into the Trust.

Reasons to Update

• A change in marital status.
• The birth or adoption of a child.
• A move to another state.
• A significant change in financial status.
• A significant change in tax laws.
• The death of a beneficiary.
• A desire to add or change beneficiaries.
• The death or incapacity of a named trustee.

Pour-Over Will

PDF*

MS Word

* You need Adobe ® Reader ® to read PDF files, it is free.