A revocable living trust is a popular planning tool that can be used to designate who gets your property when you die. The trust can also solve problems and answer questions that come up when distributing your assets. Most living trusts are designated as “revocable” because you, as the owner of the trust, can make changes as long as you are alive. Things change, and your inheritance can, too. Lawyers sometimes refer to this feature as “inter vivos.”
Living trusts are a much talked about topic in the field of financial planning. This is for a good reason. Most people use living trusts to avoid probate, a court-supervised process that is used to divide up your assets after death. Probate court can be a huge burden on the loved ones you leave behind. It’s unnecessarily expensive and time-consuming, which can compound the grief of families as they move toward emotional closure. Court cases can easily drag on, especially if your family gets into a dispute.
A living trust clarifies your wishes, and property left through a living trust can pass to beneficiaries, skipping the added stress of probate court after you pass away
What Exactly Is A Trust?
A trust is an arrangement in which you, as the trustee, hold legal title to the property of another person or group of people. These people are referred to as the beneficiaries of the living trust. When setting up a living trust, every trust must have at least one trustee and one beneficiary.
The property that is placed into the trust is called the corpus. The trust document will also designate the stipulations of the trust. You can designate rules for the trustee to follow when managing, distributing, and generally overseeing the corpus.
What is the Law on Living Trusts in Minnesota?
Minnesota laws recognizes the living trust as a legal, valid document used to transfer property after death. The law specifies that a trust is created by the transfer of property by the owner to the trustee. In legal documents, the owner of the property is called the “grantor,” “donor,” or “settlor.” The owner of the property can choose whoever they please as the trustee. The trustee holds the title to the property and manages the property for the benefit of the beneficiaries – the people, organization or business you plan to leave the property to.
How Does A Revocable Living Trust Benefit Me?
A Living Trust minimizes the hassle of passing down property to your loved ones. Because a living trust is set up while you are still alive, you can think of it as a living document. It can change and adapt to your specifications as long as you are alive.
Your loved ones will appreciate the time and money saved by avoiding probate court. When you pass property on via a trust, versus a will, people who might want to place claim to the property may have limited means of challenging it. When you operate solely with a will, disinherited heirs or other trouble making family member or even business partners can challenge the document, tying up your heir’s money, time, and rightful inheritance in court for years.
Creating Your Own Living Trust Document
You should prepare your living trust document with the help of an attorney. When you do this, you’ll be able to retain full control of what will happen to your assets when you’re gone. The attorney will witness your signature and help you with the language of the documents. When writing up the trust, you can even set terms and stipulations for family members to follow. This will also allow for circumstances such as leaving a trust to a minor who can collect it when he or she is 18. You can even specify when or how to invest money that you leave to certain relatives, or specify that a certain person gets their inheritance once they’ve finished college or gotten married.
Because you wrote the trust, you get to call the shots. And, because it is revocable, you can change those terms and conditions whenever you choose.
Revocable living trusts are a powerful tool for financial and inheritance planning. To make sure that you get the most out of your living trust document, you should consult with a competent attorney who is aware of local and national estate laws. We’d be happy to help you draw up a living trust document or otherwise help plan the details of your estate. Please feel free to contact us to get started with planning your estate.