THE LIVING REVOCABLE TRUST
Any trust that becomes effective during your life is a living trust. Such a trust that contains words like the following is a revocable trust.
"I reserve the right at any time to revoke this trust in whole or in part."
The primary purpose of the Living Revocable Trust (LRT) is to avoid probate. The LRT, in and of itself, does not save taxes. However, it is often used in more sophisticated estate plans, and, along with a By-Pass Trust, does save taxes.
A living trust has three primary offices. They are:
In most states one person, (you) can fill all three offices.
In addition to these three, you will want a Standby Trustee and a Standby Beneficiary. The Standby, or contingent, Trustee takes over in case of your death or disability. The Standby, or backup, Beneficiary generally does not benefit until the end of your life.
A bank or stockbrokerage trust department is the best Standby Trustee. Either a person, a trust or an institution can be the Standby Beneficiary.
To make an LRT effective, you must fund it. You must put assets into it. Unfortunately, many people think they have an effective LRT; but, have never transferred any assets to the trust. Therefore, they have an empty trust ... a mere piece of paper.
People who want to avoid the time, expense and publicity of probate will want an LRT.
To leave assets to our institution through your LRT, your trust may say, "At death of Trustor, the Standby Trustee is to give ten (10) percent of the Trust assets to "The Foundation"."