The Explanation of a California Revocable Living Trust
REVOCABLE LIVING TRUST: As part of a complete Estate Plan containing a California Revocable Living Trust (Living Trust), Durable Power of Attorney, Advance Healthcare Directive (Living Will), and Pour over Will, a Revocable Living Trust (also known as a “Living Trust” is a legal entity created to hold title to assets. It is a “living” trust because you create it and use it while you are alive. It is “revocable” because you can change its terms (amend the trust), or cancel it (revoke it) at any time while you are alive. Assets which are titled in the name of your living trust will not need to go through the Probate process at your death(s). You manage the trust as Trustee, and receive the benefits of the assets of the trust as beneficiary.
People Involved in a Living Trust:
TRUSTOR: The Trustor (also known as the ”Grantor” or “Settlor”) is the person who creates the trust (you). The Trustor determines what the trust will say, who will inherit (beneficiary), and who will manage the trust once the Trustor is deceased or incapacitated (Trustee). The Trustor is the only person who can change (amend) the trust, or cancel (revoke) the trust.
TRUSTEE: The Trustee manages the assets of the trust, and determines what the investments will be, which bills will get paid, and how the trust will be run. The Trustor of the trust is usually also the Trustee, while the Trustor is living and competent. Once the Trustee is deceased, a new Trustee, who is named in the trust document, steps in to manage the trust, and distribute the trust to the heirs.
BENEFICIARY: The beneficiary of the trust is usually the Trustor (you). While you are alive you get the use of your money just like you did before you had a trust. It is still your money, house, investments, etc., to do with as you please. Once you are deceased, the people you have chosen as beneficiaries will receive the trust assets. It is the job of the Trustee to carry out your wishes, and give the trust to the beneficiaries.