Revocable and Irrevocable Living Trusts: Which One Should You Get?

Updated: Apr 21

What's The Difference Between The Two And Which One Best Suits You


A trust is a legal institution that holds assets on behalf of another. Living trusts are established to benefit the Trust creators (also known as "Settlors" or "Grantors") during their lives. Living trusts also specify how assets will be managed and distributed after the Grantors have died.

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A living trust is a legal entity that you establish before you die. The property you transfer into the trust remains in the trust's ownership. You can continue to be the trustee and have authority over your assets until you pass away, at which point your assets are transferred to the named successor trustee. You can name a trustee to oversee the trust if you become incompetent, which you can do with a trust. In the case of your mental incapacity, a living trust allows you to administer your assets without the need for a supervised conservatorship (e.g., stroke or dementia).


Because the trust controls the property, your assets are usually not subject to probate after you die. This procedure will save your beneficiaries a lot of time and money. It also helps to relieve stress while you're going through a difficult time.


A California Estate Attorney usually drafts a living trust. The assets are transferred into the Trust once the terms of the Trust have been formed. For example, if the Grantors own a home, the property will be lawfully transferred to the Trustee; the Grantors will sign a deed transferring the title to the Trustee and record the deed with the County Recorder's office. The Trust will also receive the Grantor's bank account(s) and other assets. The assets are subsequently legally transferred to the Trustee.


Trustee


The Trust management is the Trustee. During their lifetimes, the Grantors of a Living Trust are usually the original Trustees. The Grantors/Trustees will be responsible for managing their own assets. The Grantors can also choose someone to handle the Trust's assets, such as a family member, a friend, or even a qualified fiduciary. The Trustees are the ones who make financial choices about the Trust's assets.