The Living Trust
A Living Trust is a set of instructions about how you want your assets used. It’s a contract between you (the “Trustor”) and the person who is going to carry out your instructions (the “Trustee”). You will always be the Trustor. You’ll also act as the Trustee in the beginning, and you’ll identify who should take over if you can no longer act.
The instructions in the Trust cover three time periods.
-While you’re alive and well: You’ll have unlimited control over the Trust. You can change the instructions in the Trust, put assets into the Trust, take assets out of the Trust and even get rid of the Trust altogether.
-If you become incapacitated: someone else will take over as the successor Trustee. That person will have limited control over the Trust; his or her job will be using the Trust assets to take care of you and your dependents. Your successor Trustee cannot change the terms of the Trust; he/she can only carry out your instructions.
-After your death: the person you’ve named as the successor Trustee will take over. Your successor Trustee cannot change the terms of the Trust; his or her job will be gathering all the assets and getting them to your beneficiaries as quickly as possible.