The self-trusteed living trust is a popular variation of living trust. You serve as the trustee of your trust while you are alive and competent and name a successor trustee to act in the event of your death or incapacity. Assets previously held in your sole name are registered in your name as trustee of the trust. If you become incapacitated, the successor trustee continues the administration of the assets for your benefit. After your death, the trust can continue for the benefit of others. All of the advantages of a living trust described here apply to a self-trusteed living trust.
Probate is the court process by which title to assets owned in your name alone are transferred after your death. Probate may be expensive and time-consuming depending on the value and type of assets in your estate. Placing assets in a living trust is a method by which you can avoid the expense and delays sometimes associated with probate court proceedings.
Even more costly and time-consuming than probate proceedings for decedents are guardianship and conservator proceedings for people who have become incapacitated. Through a living trust, you select a successor trustee to manage your affairs should you become incapacitated, thereby avoiding court proceedings and the court-supervised management of your assets and affairs.
When your estate goes through probate, your Will and other documents become public record. A living trust provides you with a greater degree of privacy because the trust provisions and the assets in your estate are not subject to public disclosure.
Estate Tax Savings
If the value of your estate is more than the amount excluded from federal estate tax, it could be subject to estate tax when you die. A trust may enable you to reduce or eliminate estate tax through the latest tax-saving techniques and ensure that more of your estate goes to the people or charities that you choose.
Management of Assets for Children or Grandchildren
You select a person to serve as successor trustee so that trust assets can be maintained in the trust after your death instead of being distributed outright to beneficiaries who may be unable to handle the management of assets themselves due to their age, disability or other factors. Without a trust, a minor receiving an inheritance would need to have a conservator appointed by the probate court to manage the inheritance. At age 18, the funds would be turned over to the beneficiary. With a trust, the trustee can manage the funds until the beneficiary is older and more mature.
Article written by Karen L. Stewart, Attorney and Counselor. For more information, please see my website, www.customestateplans.com.