Estate Gifts - Revocable Living Trust
At first glance, a revocable living trust document would look very much like a will. It is a legal agreement that specifies the distribution of your property when you die. However, there is one very important difference between a will and a living trust. When you establish a living trust, you must actually transfer ownership of your titled assets into the trust. Technically, you no longer own assets. The living trust owns the assets, but you control the trust. You are free to change the trust provisions, add or remove assets, or even cancel the entire trust arrangement during your lifetime.
Through a "pour over will," you can transfer assets that do not have a legal title to the trustee for inclusion in your living trust and distribute the assets according to the trust terms. Assets placed into your trust in this manner will be subject to the probate process.
At your death, the trustee will distribute the assets from the trust, according to your wishes, outside of the probate process. If you become incapacitated, your successor trustee can act on your behalf and manage the assets and provisions of your living trust without the court-ordered appointment of a conservator.
You can also use your living trust to make charitable gifts or establish charitable trusts at your death. This is an effective way to provide income for your heirs, make a substantial gift to Cedarville University, and reduce or eliminate taxes on the value of your estate.
A revocable living trust can be a simple, yet effective document. We recommend you have it drafted by a professional. You should discuss your wishes with your attorney to select the best course of action for putting your plans into motion.
Example
Upon the recommendation of their advisors, Mr. and Mrs. Kearns have transferred the bulk of their assets to two revocable living trusts. At the death of one spouse, the trusts provide for distribution of all assets to the other and, ultimately, the children and grandchildren.
Mr. and Mrs. Kearns designated themselves as trustees. However, if either becomes incapacitated, the other spouse can take over. Should both become disabled, they have named a financial institution's trust department to carry out the responsibilities of trustee. They also have wills that will distribute to their trusts any property not placed in trust during their lives.
After reviewing their assets, the Kearns have decided that they have sufficient funds to make a gift to Cedarville University through their estate plans. They direct their attorney to revise their trusts, providing that all the assets that remain in their trusts after providing for their loved ones be given to Cedarville.
We are grateful for those who have elevated Cedarville to "family status" as an heir in their estate plans. If you are one of these special individuals, we invite you to join The William Gibson Society, allowing us the opportunity to say "thank-you."
