A living trust is a special relationship which is created by a contract between a "grantor" and a "trustee", for the benefit of a "beneficiary". The living trust provides that the grantor will transfer property to the trustee who will hold, invest and distribute the income and principal of the trust, to or for the benefit of the "beneficiary". The grantor, the trustee and the beneficiary may be the same person, and in most "living trusts" typically are the same person.

The trust document designates one or more successor trustees that will manage and invest the property during the Grantor’s lifetime if he or she is unable to because of sickness or disability. This same successor trustee will also distribute the trust property to remainder beneficiaries after the Grantor’s death.

The person creating the trust retains complete control over all assets transferred to the trust. He or she can withdraw income and principal from the trust at any time without the consent or advice of any person. As Trustee, the person can invest and reinvest the trust assets in the same manner after the trust is established as the individual could before creation of the trust. No investments need to be sold when the trust is created. Investments are simply transferred to the trust. There are no income tax returns required to be filed while the Grantor is the Trustee, and the transfer of property to the trust is not a taxable event for income tax purposes.

A "living" trust is a trust that you create while you are living to benefit you while you are alive and to provide for the efficient distribution of your assets upon your death. It is probably the best method to provide for money management during your lifetime and when you can no longer properly manage your finances.

What are the advantages of a living trust?

The person creating the trust retains complete control over all assets transferred to the trust. He or she can withdraw income and principal from the trust at any time without the consent or advice of any person.

When the Grantor can no longer properly manage the trust assets, the successor Trustee will continue to manage the trust property, pay bills, reinvest assets, without interruption during the Grantor’s lifetime. A sudden medical condition or accident should not effect the efficient management of the trust assets if the trust is structured properly.

The assets that are transferred to the trust do not go through probate and the administration of the trust and distribution to the remainder beneficiaries can be less expensive and more efficient than a probate proceeding.

Despite these advantages, the living trust may not be for everyone. Everyone's situation is unique. We all have different assets, abilities, and objectives. You should consult with an attorney and other estate planning professionals to determine if your situation is one that can benefit from the establishment of a living trust.

Fort Myers Law Firm

Dignam Law offers personalized attention and customized solutions in estate planning. Michael F. Dignam has practiced as a tax and estate planning attorney in the Fort Myers area for over thirty five years.

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Address: 1601 Hendry Street,
Fort Myers, Florida, 33901

Phone: (239) 337-7888

Email: mfdignam@dignamlaw.com

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