Can I Change a Living Trust?

Absolutely! You have the power to amend, revise, and even cancel your trust while you are alive and legally competent. You can move assets into and out of the trust any time you like and it is NOT necessary to change your trust whenever you do so.

What Makes a Living Trust Work?

Assets that are owned in your individual name can only be transferred with your signature. If you are declared legally incompetent, your signature is no longer valid. At your death, your signature is extremely difficult to obtain (and a judge might not believe it to be your signature). The solution to this is a court proceeding called Probate, if the person has died, or Conservatorship, if the person is alive but legally incompetent. In this court proceeding, the judge appoints a “representative” who can provide a signature on your behalf. However, in a Living Trust, signature authority is held by the Trustee of the Trust. If the original Trustee dies or becomes incompetent, there is a pre-designated Successor Trustee available to provide the needed signatures, thus avoiding the need to have a Probate or Conservatorship proceeding.

Can I be the Trustee?

At the moment you sign and date your trust, you are the Trustmaker, Trustee, and Beneficiary, all at the same time. What this means is that you have all of the decision-making responsibility for the trust while you’re alive and competent. If you become incompetent, you can no longer serve as the Trustee, but you remain the Beneficiary and your Successor Trustee manages the trust for your benefit. When you die, you are no longer the Beneficiary and your Successor Trustee is legally required to follow the instructions you, the Trustmaker, specified in your Living Trust documents concerning the distribution and management of the trust assets to or for the beneficiaries you named.

What is “Funding” a Trust?

“Funding” your trust describes the process of changing the title of each asset from yourself as an individual to yourself as Trustee of your trust. Most of your major assets have some sort of paperwork that gives evidence as to who owns them. An example would be a real estate deed. Another would be a bank account. After you sign and date your trust, you need to change the title of each asset of this type. THIS IS A BIG DEAL!! This is the “secret” trick that is the key to avoiding Probate and Conservatorship. After you have changed the title, then the asset may be transferred or encumbered by the signature of the TRUSTEE, which will either be yourself when you are alive and competent, or your Successor Trustee when you are either incompetent or deceased. In either case, the probate court is NOT involved.

Why Do I Also Need a Will?

The Will prepared as a part of your Living Trust package is known as a “Pour-Over Will,” meaning that it “pours over into the trust” anything not already “funded” to the trust. This then becomes a catch-all and makes sure that if there are any assets outside of the trust (gifts, inheritances, or simply forgotten) we have a way of placing those in the trust for distribution according to your instructions contained in the trust.

Why is the Trust So Wordy?

Trusts are wordy because no one knows what will happen to you in the future. The trust tries to cover as many situations as possible so you will not be lacking anything when the time comes for it to be used. Most of the words are there for a good reason and reflect the highest professional standards in drafting of legal documents. Many of the words may never apply to you, but the important point is, they could.