Trust-based Estates: The Revocable Living Trust
- Date: 2009-08-02 - Word Count: 580
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Trust-based estates are different from will-based estates in that they include a revocable living trust along with a last will and testament. Since the trust includes most of the details that a last will would also include, the will associated with a trust-based estate is far less detailed and includes such pertinent details as the name of the executor or personal representative of the estate.
What is The Revocable Living Trust?
The revocable living trust encompasses three phases of an individual's life. These phases include the time when he is alive and well, the time he becomes mentally incapacitated if he does, and the time after he dies. In some cases, the middle stage of the trustmaker's life never occurs and is simply disregarded.
Typically, the individual who creates a revocable living trust is referred to as the trustmaker. If he is so inclined, he can hire someone to oversee the trust. Typically, this individual will be his attorney or institution. If he decides to oversee the revocable living trust himself while he is healthy and mentally alert, he can choose to do so. When that occurs, the trustmaker is also referred to as the trustee.
How to Create a Revocable Living Trust: First Stage
The first stage of a revocable living trust encompasses that portion of the trustmaker's life when he is alive. Specific provisions are in place within the trust during this stage of the trustmaker's life. These provisions are designed to allow him to invest, manage, and spend his trust assets in the manner that he sees fit.
Generally, it is business as usual with a tiny twist. The trustee, typically also the trustmaker, signs off on each transaction regarding trust assets. Additionally, if the trustmaker is the trustee, he can use his social security number as his taxpayer identification number. His income taxes can then be filed using an IRS 1040 form instead of an IRS 1041 form.
How to Create a Revocable Living Trust: Second Stage
The provisions of the trust agreement that relate to mental incapacity are in place as the second stage of the document. They depict the procedures that must be followed should the trustmaker become mentally incompetent. In some cases, this stage comes about when the trustmaker has suffered a mental breakdown or the ravaging effects of Alzheimer's disease. In other cases, it involves an incapacity due to medical treatments and medications.
If and when this stage comes to pass, the trustmaker can no longer act as trustee and someone else will have to take over for him. This individual is named as the successor trustee within the trust agreement itself. He is listed as a "disability trustee" who will take over for the trustee should he suffer a major downgrade of his mental capacity. The "disability trustee" will be able to take over the management of the trustmaker's finances including his assets and bills.
How to Create a Revocable Living Trust: Third Stage
The third stage of the revocable living trust encompasses the time when the trustmaker has died. The successor trustee at this time is referred to as the "administrative trustee." This individual is named within the agreement. He takes over all of the trustmaker's finances including his debts, bills, and taxes. The disbursement of the remaining funds is clearly delineated within the agreement and will occur in a timely fashion as long as all of the pertinent details have been taken care of in full. The distribution of the funds will be taken care of by the "administrative trustee."
What is The Revocable Living Trust?
The revocable living trust encompasses three phases of an individual's life. These phases include the time when he is alive and well, the time he becomes mentally incapacitated if he does, and the time after he dies. In some cases, the middle stage of the trustmaker's life never occurs and is simply disregarded.
Typically, the individual who creates a revocable living trust is referred to as the trustmaker. If he is so inclined, he can hire someone to oversee the trust. Typically, this individual will be his attorney or institution. If he decides to oversee the revocable living trust himself while he is healthy and mentally alert, he can choose to do so. When that occurs, the trustmaker is also referred to as the trustee.
How to Create a Revocable Living Trust: First Stage
The first stage of a revocable living trust encompasses that portion of the trustmaker's life when he is alive. Specific provisions are in place within the trust during this stage of the trustmaker's life. These provisions are designed to allow him to invest, manage, and spend his trust assets in the manner that he sees fit.
Generally, it is business as usual with a tiny twist. The trustee, typically also the trustmaker, signs off on each transaction regarding trust assets. Additionally, if the trustmaker is the trustee, he can use his social security number as his taxpayer identification number. His income taxes can then be filed using an IRS 1040 form instead of an IRS 1041 form.
How to Create a Revocable Living Trust: Second Stage
The provisions of the trust agreement that relate to mental incapacity are in place as the second stage of the document. They depict the procedures that must be followed should the trustmaker become mentally incompetent. In some cases, this stage comes about when the trustmaker has suffered a mental breakdown or the ravaging effects of Alzheimer's disease. In other cases, it involves an incapacity due to medical treatments and medications.
If and when this stage comes to pass, the trustmaker can no longer act as trustee and someone else will have to take over for him. This individual is named as the successor trustee within the trust agreement itself. He is listed as a "disability trustee" who will take over for the trustee should he suffer a major downgrade of his mental capacity. The "disability trustee" will be able to take over the management of the trustmaker's finances including his assets and bills.
How to Create a Revocable Living Trust: Third Stage
The third stage of the revocable living trust encompasses the time when the trustmaker has died. The successor trustee at this time is referred to as the "administrative trustee." This individual is named within the agreement. He takes over all of the trustmaker's finances including his debts, bills, and taxes. The disbursement of the remaining funds is clearly delineated within the agreement and will occur in a timely fashion as long as all of the pertinent details have been taken care of in full. The distribution of the funds will be taken care of by the "administrative trustee."
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