Call For Free Consultation: (858) 278-2800

Temecula Office: (951) 223-7000

What Is A Trust And What Role Does It Have In An Estate Plan?

Most people have revocable living trusts and you often hear the term family trust or inter vivos trust. A trust is a legal entity that you create, which you are in charge of while you are alive, like your own little family company that will own your house, your financial assets and your bank accounts, and it will include a set of instructions with it. If you die or become incapacitated, it will say who will manage the trust for you and who will receive the assets upon your death. The main role of the trust is to keep your estate out of the probate system. The way it works is that when the successor trustee takes over, they distribute the assets according to how you laid it out in the trust; it is kind of like there is a will inside of the trust, and your affairs are managed without the need of going inside of a probate court room.

Who Are the Different Parties Typically Involved In A Trust?

In a trust, the owner of the trust is called a Settlor; you also hear the term Grantor or Trustor, but I prefer Settlor because it is easier to remember, since you are settling up your family’s affairs. While you, the settlor, are alive, the trust is revocable, which means you can change it all you want, but when you die the trust then becomes irrevocable, which means no one can change it, which is what irrevocable means. The next party is the trustee, which is a fancy name for manager, and the trustee basically holds the pen and signs on the dotted line.

The third party in a trust is the beneficiary that is also you while you are alive; basically, you own and manage the trust for your benefit, but when you are gone, you appoint the new trustee and you say who the new beneficiaries are; that is how a trust works. In a will you have an executor who will go through the probate process for you and a guardian for your children who will take care of them. The agent handles financial management, powers of attorney and medical directives; they basically manage your affairs if you cannot manage them for yourself. Those are really the big players in terms of who you have to name in a trust.

How Long Does it Typically Take to Create An Estate Plan?

I always joke with people that estate planning takes 20 years and 20 minutes; that is 20 years getting around to it and 20 minutes at your kitchen table to answer a bunch of questions. When most people come in for their first meeting and they are comfortable with me, I give them a questionnaire, they come back for their planning meeting a couple weeks later, and a few weeks after that, they sign their estate planning documents and we make sure their beneficiary designations are squared away and then they change the name on their bank account and their investment accounts and they are pretty well done.

On average, I tell people it will take six weeks from when they first meet with me to be done. Sometimes it is faster, sometimes it is slower. It all depends on what the person is really trying to do.

For more information on Role of Trusts In Estate Plans, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (858) 278-2800 today.

San Diego Estate PLanning Guide by Steven Bliss

Fundamentals of
Estate Planning

FREE DOWNLOAD
Get Help Now