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Estate planning can appear complicated because we attorneys have so many odd names for different things. You can find yourself easily asking, who talks like that? Understanding your trust starts with knowing what are the moving parts in your trust.
When you create your trust, you’ll see that the trust refers to you as the Grantor or the Settlor or Trustor or Trustmaker. Whatever term is used; you’ll always be the trust maker of your trust.
Revocable or Irrevocable (and when)
Trusts can be revocable (meaning you can change them anytime you want as the trust maker) or irrevocable (meaning you can’t change them). Most family plans have a revocable living trust as the foundation. That trust can become partly irrevocable at the death of the first spouse, and completely irrevocable after the death of both trust makers. Irrevocable trusts are typically created for asset protection and tax planning purposes.
Who the beneficiaries are can change at certain events. Typically, when you create your trust, you’re the beneficiary. When both trust makers are gone, you’ve specified who the new beneficiaries will be, whether it’s your children, other individuals or maybe even charities.
That’s the fancy way of saying as the trust maker, you get to decide who gets what and when, and under what conditions. With a trust, you get to choose when and how your beneficiaries get your stuff. No one really wants to control from the grave, but everyone should act to protect their beneficiaries.
Ownership & Beneficiary Designations
Trusts govern what is inside them, and nothing more. That means you have to act to make the trust the owner of your assets. Some assets are controlled by title, some are controlled by beneficiary designations. Because not all assets should be transferred into your trust, you should work carefully with your estate planning attorney on this step of creating your estate plan.