Trustor: The person establishing the trust who has the power to revoke and amend same. Also known as the Grantor or Settlor.
Trustee: The person in charge of the Trust. You are typically the Trustee when the Trust is initially established. Upon your death, resignation or incapacity, the successor Trustee will assume this duty.
Beneficiary: The person(s) receiving the benefit of the Trust.
Upon the Trustor’s death, the Trust becomes irrevocable and the beneficiary changes from the Trustor to the Trustor’s beneficiaries of choice.
There are many advantages of establishing a revocable trust during your lifetime. However, it is important that you work with an attorney that is well versed in estate planning and is able to properly set up this advance estate planning device.
Avoiding Probate. Because a Revocable Living Trust requires the person establishing the trust (the “Trustor”) to transfer ownership of his property to a Trustee, no property remains at death to pass through probate, since probate only pertains to individually-owned assets. As a result, a decedent’s property held in trust can usually be made available to benefit the trust beneficiaries more quickly than can property passing through probate pursuant to a decedent’s will and assets that need immediate care. The avoidance of probate is particularly advantageous if the decedent’s property includes real estate in several different states.
Managing Property During One’s Lifetime. A Revocable Living Trust can help answer the difficult question of how to manage one’s assets when age or illness prevents continued personal supervision of those assets. Because the Trustor’s assets are transferred to the Trustee, the Trustee has both flexibility and discretion in dealing with those assets.
Privacy. Probate court files in South Carolina are open to public scrutiny. The use of a Revocable Living Trust hides the nature and beneficiaries of a person’s estate and avoids the publicity that may result from scrutiny of the probate file.
Asset Protection After Death. Depending on how the individual trust shares are established for the beneficiaries upon the Trustor’s death, the Revocable Living Trust may add an extra layer of protection for such beneficiaries. For example, if a beneficiary has a drug or alcohol issue, the Trustor may set up terms whereby the beneficiary must submit to a drug or alcohol test prior to receiving any distributions under the Trust. If a beneficiary has a creditor problem, the Trustor may name a third party Trustee to manage the money for the beneficiary – if set up correctly, this type of trust will prevent the creditors of the beneficiary from attacking the principal of the Trust. If a beneficiary is on government assistance, the Trustor may set-up a special needs trust (or supplemental needs trust) for the beneficiary so that the government assistance is not suspended for the beneficiary.