A trust is a written agreement in which a person transfers ownership of their assets from themselves to another entity, to wit, their trust. A revocable living trust (also called a "living trust" or "revocable trust") is one type of trust.

It's a "living" trust because you create it while you're alive. It's "revocable" because, as long as you're mentally competent, you can amend or revoke the trust at any time, for any reason. You need no one's permission to do so.

A trust involves three parties:

• The settlor or grantor is you, the person who creates the trust.
• The trustee is the person who agrees to accept your assets and manage it as the trust agreement directs. You can name more than one trustee, thus creating co-trustees who must act together.
• The beneficiaries are those who will receive your assets as directed by the terms you specified in your trust.

Who can be the trustee?

Any competent adult may be a trustee. Usually, you name yourself, or you and your spouse, as the trustee because you want full control of the property while you're alive. Many people, however, select a friend, relative, or qualified corporation (one to which the state has given trust powers) to serve as trustee.

If you choose one individual as a trustee, you also name a successor trustee (a second person or a corporate trustee). This party acts when the first trustee dies or is unable or unwilling to continue as trustee.

What can a revocable living trust do?

• provide for minor children when you die - In a living trust, you can make provisions for your spouse and children in any fashion you choose, including paying portions of your estate to children over time (i.e., 25% of the estate when your child attains 21 years of age, 25% of the estate when your child attains 25 years or age, and the balance, plus any accrued interest, when your child attains 30 years of age).

• avoid probate - Property in your revocable living trust doesn't go through probate after your death. One advantage of avoiding probate is expedited distribution (probate takes 10-24 months, or more, whereas a trust takes 1-3 months). Another advantage is financial; you save in probate fees (6%-15% of your gross estate, plus attorneys' fees). Lastly, probate is a matter of public records, whereas a living trust doesn't become part of the public record and remains confidential.

• provide property management if you can't manage your affairs - If you become too ill or disabled to manage your property, your trustee or successor trustee will do this for you. With no trust in place, you would need a Conservator to be appointed by the court. You avoid the trouble and expense of setting up such arrangements if you have a living trust.

• provide financial management of your property - You may act as trustee at first and later decide you no longer wish to do so. A trustee or successor trustee you've selected can take over the day-to-day property management.

Should I have an attorney prepare my trust?

An attorney can make sure the legal documents are prepared properly and fit your situation. Do-it-yourself kits and formbooks are available, but these tend to take a one-size-fits-all approach, rather than meeting your unique needs.

The do-it-yourself materials are cheaper than hiring an attorney. But if the trust isn't tailored to your needs or if the documents are poorly prepared, major problems and big costs may arise later

What about "special offers" I see advertised?

Proceed with caution. Scam artists try to take advantage of older people's fears about what will happen to their estates. Some unscrupulous businesses sell revocable living trusts, even if unneeded, to gain access to your private financial information. Then they try to sell you other financial products.

Beware of anyone who calls to offer an in-home appointment to explain why a living trust is right for you. Immediately walk away from anyone who tries to pressure you into buying a trust. Take your time to be certain you're getting what you want and need.

If you have assets and want your loved ones to avoid the hardships of probate at your death, you should strongly consider creating a living trust. You may also consider encouraging other family members to have a trust so you won't have to deal with probate as a beneficiary at their death.

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