Living trust documents can be a key way that a person can make sure a legal entity exists that will hold assets like real estate, money, and other valuables securely. This kind of document can help manage assets while you are alive and can also impact how assets are distributed upon your death. Having a living trust template in place can make it much easier for your family to take care of your needs if you are not well.

There are various living trust forms that you could use as an example to create your own document of this nature, but the process is complex. This is a very important piece of legal documentation that you probably do not want to leave up to chance. Many people work with an estate planning lawyer to create this document and to get their affairs in order before they are gone.

Living Trust Forms
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Living Trust Forms

What is a living trust?

As living trust samples or revocable living trust forms will make clear, a living trust is a document that is used to make sure that a legal entity is created that manages and holds your assets for you while you are alive. This trust can include monetary assets, property assets, and also valuables. When you create this kind of trust, the dispersal of your assets can also be guided should you pass away.

This is not the same as a testamentary trust, which is part of a last will and testament, as this document is active while you are alive. If you have other estate planning documents and processes in place for when you pass away, the revocable living trust will no longer be in effect, and the process of taking care of dispersing the estate will pass to the other trust and will documentation.

What is a revocable living trust?

A revocable living trust is a trust type that offers the grantor, who is the person who is making the trust, the ability to be flexible in what assets are included in the trust. This kind of trust can be changed or revoked while the person is alive at any point.

This document might be called by various names:

  • Trust
  • Inter-vivos trust
  • Revocable trust
  • Revocable living trust

Most states have their own preferred name for the revocable living trust, and you can usually just use that naming standard to refer to the document that you have created.

Most people create living trusts and regular trusts to protect their estates from passing through probate. Probate can take months or even years to be completed, and inheritance tax can eat away at your estate. Having a trust in place is the best way to avoid this process and make sure that your loved ones are not left waiting for a decision about your estate or funds that they need in order to care for your properties, businesses, or even funeral costs.

Living Trust Documents

How much does a living trust cost?

There are a couple of different cost considerations that you need to have in mind when you are making a living trust or thinking about making one. You will need to consider that working with a lawyer will cost money, and you might need to spend about $2,000-$4,000 having your trust documents drawn up by an expert.

The other cost that is associated with a living trust is the cost of upkeep of the trust and the costs related to the management of your properties and other assets by your named trustees. The trust can lead to a limitation on the processes that allow your estate to make money, and this can further impact the cost of having a living trust in place.

Always make sure to look into the costs related to this kind of estate planning process before you commit to completing it. Often, the costs associated with a living trust far outweigh the risk of not having any form of estate planning in place to protect your interests if you should be unable to take care of them yourself.

What are the disadvantages of a living trust?

There are many reasons that you might need to make a trust:

  • Have a property that you want to pass on to others
  • Want your beneficiaries to get access to property and assets as soon as possible
  • Have a particular way that you want to have your possessions and money distributed
  • Want to avoid probate fees and tax
  • Prefer for your estate information to be kept private

There are some main pros to the living trust process, and avoiding probate is the first and most obvious of benefits. The other benefits include the flexible nature of this kind of trust that can be changed as needed at any time. You can also help keep your assets separated in a marriage with a living trust, and you can keep your estate information from being public knowledge.

There are some disadvantages to having a living trust in place as well, however. Trusts can cost a lot of money to keep active and administer. It can also be complicated to create a trust, and the trust details can cause issues among family and friends who are named in the trust. The trustor also hands over control of their assets and properties to the persons who are named in the trust, which can cause major issues in the situation where you are still alive and want to make your own decisions.

Revocable Living Trust Forms

How to complete a living trust form

If you have decided to complete a living trust form or have a lawyer make your own living trust documents for you, you need to know more about what is included in these documents so you are prepared to complete this process efficiently.

  1. Grantor Information: Put your name and address at the top of the document. You will need to use your full legal name on every section of this document.
  2. Indicate the Reason for Creating the Trust: The trust that you are making must be supported by a reason for its creation. This is a legal requirement, and it cannot be left out of your documents. You will want to just indicate that you are managing your assets, or that you want to be sure that your estate information remains private, or any other factor that usually guides people to make a trust.
  3. Trustee Information: The information about all of your trustees needs to be included in this part of the document. You will need to name all of these people by their full legal names, and you should indicate their relationship to you as well. The grantor often chooses themselves as the initial trustee, and this allows them to continue to manage the trust while they are alive.
  4. Beneficiaries and Gifts: Name who will receive which assets from your trust, and then name gifts and percentages of the estate that will be given to each person. You can give special gifts to most of your trustees and leave your whole estate to one person or split up all of your assets as many ways as you wish. There is no requirement for this process, and you can choose how to split up your assets in any way that works for your needs.
  5. Sign and Notarize: You will need to sign the document and date it. You will also need to make sure that a notary is present to witness your signature and sign off on the document as well. There are a few states that only require that two witnesses are present and sign the document, but this is not nearly as common as requiring a notary to be present for the signing.

Make sure that you take the notary part of the process seriously. Your trust will not be valid if you have not taken care of this part of the process correctly.

Are living trusts a matter of public record?

No, a living trust will not be a matter of public record. The successor and trustees will have copies of the documents, but there is no copy of the trust that is filed with a county or state office of any kind. If the living trust is contested in court, it can become a part of the public record via court proceedings, but in all other cases, this is not how these documents are handled.

The privacy of your information is a key aspect that makes creating a living trust attractive to many people, so having to file your trust publicly would defeat the purpose of making this document in the first place for many people.

What is the difference between a revocable and irrevocable trust?

Irrevocable trusts and revocable trusts offer different degrees of control and ownership to the grantor once the trust is created. Revocable trusts can be modified, or they can be terminated by the grantor at any time so long as the grantor is of sound mind and competent at the time of the decision. The assets that are included in the trust will be considered the grantor’s property unless they pass away.

However, in an irrevocable trust, the grantor cannot alter the documents or the status of the trust without the permission of the beneficiaries. The grantor will have legally given their rights of determination and ownership of their assets to the trustees in this situation. In most cases, the grantor is also moved out of their taxable estate as well.

There are many obvious reasons that a revocable trust is most people’s first choice when creating a trust to protect their assets while they are alive. There are a few instances where the irrevocable trust is a good idea, and you should seek legal counsel before agreeing to set up an irrevocable trust. You should be fully aware of what you agree to do before you find out that this trust type is not what you want to have in place to govern your estate.

Living Trust Samples

Why do I have to have a notary for my signing?

The notary who needs to be present at your trust’s signing is there to make sure that you are signing this document of your free will and that you are not being coerced into making allowances for someone who is pressuring you to leave them money or other assets. This is an all-too-common situation when there is an elderly person involved in trust creation, and the notary is tasked with making sure that the person signing the documents does not seem to be under the influence of someone else and that they are acting of their own free will.

The notary step of the signing process also indicates that the document was made with the grantor’s full knowledge and that they were of sound mind when they created it and signed it. Due to the sensitive nature of these documents, it is key that the grantor is acting of their own free will when the documents are signed and made legally binding.

Revocable Living Trusts Can be Ideal for Many Situations

If you have property and assets that you want to leave to trustees, you need to create a living trust to handle this need. You will be able to guide the way that your assets are cared for and how they are dispersed after you pass away with the right estate planning documents and processes in place. This is one of the processes that is always a good idea to undertake if you are worried about how your possessions and assets will be handled before and after you have passed away.

While this is not the right choice for everyone, there are many benefits to securing your assets and investments in this way, and you should talk with a lawyer about the right way to set up your trust before you take any action toward this goal. The state that you live in can impact the way that your trust is built and documented, and you will also want legal guidance to verify that you have not missed any steps in the process.

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TemplateLab February 14th, 2023
Ryan Duffy
Ryan Duffy