Some of you may know that a Living Trust is also known as a Revocable Trust. Furthermore, it is a legal document which places your assets into a Trust during one’s lifetime. Upon one’s death the assets are then transferred to the stated beneficiaries by the person chosen as the Successor Trustee.

This quick and easy read is meant to help you AVOID the pitfalls that so many others fall into!

Choose your Successor Trustee Wisely and Make it Work

• Be sure that your trustee is someone that you TRUST.  Do you want this person managing your money if you become incapacitated?
• If naming co-Trustees be sure they can WORK TOGETHER.  If a client says she wants to name her two children as co-Trustees because they have issues and do not work well together, then we have a problem.  If they fight now, they most certainly will fight when the client is deceased.  Better to name an independent third party!
• When naming a Trustee, be aware of whether or not the Trustee will charge for services.

A Few Things to Remember for Success

The trustee of a revocable living trust is not supervised by the court.  This means it is easier for a dishonest Trustee to steal the money.  Keep in mind that if you become incapacitated your trustee will be handling the money for your benefit while you are alive.  Theft of the money in this circumstance directly impacts you. Choose with care!

Family tensions and bad-behavior are magnified. Children who do not get along while Mom is alive will not suddenly become fast friends and bosom buddies after she leaves this mortal plane.  In fact, if they are competitive, they will fight each other and deplete the estate.

If you take something out – put it back ASAP. When refinancing a home that is in a revocable living trust, remember, if you take it out, then PUT IT BACK INTO THE TRUST as soon as the refinancing is complete. Until you put it back, it’s not in there! Note: Some lenders have become comfortable lending to individuals who have a revocable living trust.  However, there are still some who insist that the owner transfer the house out of the trust.  Once in a while a lender will just charge an additional $200 to review the trust.  However, if the house is removed from the trust and the owner dies prior to putting the house back in the name of the trust, a court procedure will be necessary, either a one-time petition or a full probate. Not fun!

If think you need one or you have a living trust and it’s been a while since you set it up, I encourage you to reach out to your trust and estate attorney – especially if there have been major changes in your life or those of your beneficiaries. If you live in San Jose, on the Peninsula or anywhere in the South Bay Area, feel free to be in touch! I am a phone call or email away! You are welcome to use this Free 30 Minute Legal Consultation to get some of your initial questions answered at NO CHARGE. I look forward to talking with you soon.

Diane M. Brown, Esq.
Working every day to keep my clients out of court!
It’s your money… Let’s keep it that way!
Call 408-364-1234

This “ask an attorney” blog contains general information and is not meant to apply to a specific situation. Please seek advice of counsel before proceeding as each case is unique.