Most clients can benefit by creating a Living trust, rather than relying upon use of a simple Will.

A Living Trust is a legal entity that is separate from you as an individual. You transfer title of your major assets to this trust — like your investments, shares of private companies, principal residences, bare land, vacation homes, family heirlooms, etc.. During your life, you -- and your spouse, if applicable -- serve as the trustees of the trust, which gives you the power to buy, sell, and otherwise transfer any of the assets in it. When both of you die, the assets in the trust are transferred to your designated beneficiaries of the trust without going through probate at all.

A Family Trust is simply a special living trust set up to benefit members of your family. The purpose of the Family Trust is for you to progressively transfer your assets to the trust, so that legally you own no assets yourself, but for you, through the trust, to still have some control over, and get the benefit of, these assets.

You can set up a Family trust either while you are still alive (by a declaration of trust contained in a trust deed) or when you die (by the terms of your will).

The trust is established when you contribute “property” to the trust. The contributor is referred to as the "settler". The person who receives the property and manages the trust is referred to as the “trustee”. The trustee can be a family member or a trusted relative or friend. It can also be a trust company or any combination of persons.

The trustee holds the property in trust for one or more “beneficiaries”. These beneficiaries can consist of any person, a charity and even unborn children. For example, you can set up a trust today that includes all future grandchildren as beneficiaries even though you have no grandchildren right now.

Add to this flexibility the fact that you can be the settlor, the trustee and a beneficiary of your family trust, and there is virtually unlimited potential to design a trust that meets your particular family needs.

Note: Revocable vs. Irrevocable Trusts

The typical Living or Family trust is revocable, meaning it can managed and amended by you during your lifetime. An Irrevocable trust is an arrangement in which the grantor departs with ownership and control of property. Usually - though not always - this involves a gift of property to the trust set up for a charity or foundation. The trust then stands as a separate taxable entity and pays tax on its accumulated income.

Though it costs some money up front to set up a Living/Family Trust, and takes some time to manage, it costs much less than what the probate process would cost your estate.

And as with any important legal document, you should obtain competent legal advice before setting up a trust. The CC LawGroup will assist you with, not only fully understanding all the benefits and responsibilities of your trust, but also drawing up the principal document to ensure that all legal requirements are met.

The CC LawGroup
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