Understanding the “Moving Parts” in a Trust | Estate Plan Pros
Understanding the “Moving Parts” in a Trust

Discover:Create

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.

Trust Maker

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.

Beneficiaries

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. 

Distribution Standards

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.

Tags:Living Trust

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Erik Hartstrom

Erik is the founder of Estate Plan Pros, a leading estate planning practice in Elk Grove.  Erik’s practice focuses on Estate Planning Law. In Estate Planning, Erik works with clients to make the process simple, so clients can focus on more important things. He is a local authority for specialized estate planning instruments, like Special Needs Trust, Irrevocable Trusts, or other focused documents. Erik has litigated, negotiated, and mediated the gamut of family law cases. With this unique perspective as a family law and estate attorney he can often spot issues otherwise overlooked. Prior to graduating he worked as a legislative analyst for a non-profit organization, and volunteered as a youth counselor. Erik currently participates in local politics and is an active member of his local church. Erik is very happily married and has two young sons. Together, his family loves to get outdoors and enjoy the varied activities the Sacramento region has to offer.


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