There is a type of trust called a revocable living trust. When you have this type of trust in place, you gain many different advantages. One of them is the ability to control the trust while you are living. At first, you can act as the trustee and the beneficiary, and you have the power of revocation. If you want to, you can dissolve the trust entirely and take back personal possession of the assets.
When you create the trust declaration, you name a successor trustee to administer the trust after your passing. You also name successor beneficiaries to receive monetary distributions. You do not have to leave the beneficiaries lump sum inheritances, and this is one of the advantages.
The trustee could invest the assets in the trust, and if you choose to go this route, the earnings could be distributed monthly on an ongoing basis. This would ensure the long-term viability of the trust. It would be possible to give the trustee the discretion to distribute portions of the principal under certain circumstances.
These distributions would not be subject to the process of probate, so the beneficiaries could start receiving distributions in a timely manner after your passing. If you were to use a will instead of a trust, the inheritances would not be distributed for perhaps eight months to a year, because the transfers would be subject to the probate process. The process can actually take longer than a year under some circumstances.
Choice of Successor Trustee
It is possible to name an individual that you know to act as the trustee after your passing. However, you could go in another direction and use a corporate trustee.
There are some distinct advantages that you gain when you use a corporate trustee. For one, there are no longevity concerns, and there will be no conflicts of interest between the trustee and the beneficiaries.
Expertise is another advantage. The corporate trustee will know how to manage the trust, and you will have a financial professional making investment decisions.
Plus, emotions will be out of the picture. Your wishes will be carried out with regard to the nature of the asset distributions, and the trustee will not be swayed by the pleas of the beneficiaries.
When you consider all the facts, unless you know someone who is quite young who is an outstanding and unemotional money manager, a corporate trustee may be a better choice.
Free Report on Living Trusts
To learn more about living trusts, download our special report. The report is free, and you can click this link to get your copy: Free Living Trust Report.
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