No. You keep full control. You can continue to do everything you could do before, including buying and selling assets. You can make changes or even cancel your trust. Not only do you not lose control, you will actually have more control over your assets when they are in a living trust than if not.
How Does A Living Trust Work?
Grantor: The person setting up the trust – you (and your spouse), also called the creator, settlor, trustor or trust maker. As the grantor, only you can make changes to your trust. That’s how you keep control.
Trustee: Manages your trust now. Usually this will be the spouses and then upon the death of the surviving spouse, another individual or a trust company becomes the trustee.
Successor Trustee: Will step in and manage the trust for as long as necessary if you become incapacitated. At your death, your successor will distribute your assets according to your instructions. Successor trustees can be the surviving spouse, adult children, trusted friends and/or a corporate trustee. More than one should be named, in order of preference, in case your first choice is unable to act.
Beneficiaries: persons and/or organizations who will ultimately receive the assets in your trust after you die.
What Happens if I Become Incapacitated?
Your successor trustee steps in and handles your financial affairs for you for as long as necessary. He/she can write checks, make deposits, apply for disability benefits, pay bills, even sell assets if needed.
No public court proceedings are required. Everything is done privately. If you recover, you simply start handling your affairs again and your successor trustee returns to being your successor. There is no complicated paperwork or procedure to regain control as there would be if the court were involved. There is also great peace of mind in knowing that if this should ever happen to you or your spouse, you will be taken care of by someone you have selected, someone you know and trust – and not someone a court appoints to take care of you.
What Happens After I Die?
Your successor trustee will have most of the same responsibilities an executor would if you had a will. However, because he/she does not have to report to the court, everything can be done more efficiently and privately. Your successor collects any income, pays your final bills, sees that tax returns are filed and then follows your instructions for distributing your assets.
You should know that trustees are fiduciaries and they have a legal duty to follow your instructions. If your acting trustee does not follow the instructions in your trust, he/she could be held legally liable.
How is My Trust Prepared?
Your attorney will prepare your trust document according to your decisions. You decide who will be your trustee, successor trustee, beneficiaries, and how and when they will inherit from you. After you have read and approved your documents, you will sign them, and they will be notarized. Title of your assets and most beneficiary designations will then need to be changed to the name of your trust. This is called “funding” your trust.
Funding the Trust
William and Dorothy might have a condo that they use for rental purposes and they should transfer the condo into the William and Dorothy Jones’ Trust. The title should reflect the name of the trust. We call this funding a trust. A lot of people set the trust up, but if it doesn’t have the assets titled in the name of the Trust. This may not do any good. A trust may only affect assets that are placed in it. Funding a trust is of critical importance. At our firm, we won’t do a trust unless we can monitor the funding because we don’t want to do something that has less purpose.
It is not difficult to fund a trust, but it will take some time. Start with your most valuable assets and work your way down. Your attorney will probably transfer your home and other real estate to your trust for you and provide letters of instruction that you can follow to change other assets.
You do not want to leave your trust unfunded, because any assets you leave out of your trust will probably go through probate when you die and be subject to court control if you become incapacitated. You may have well-written and well-thought out instructions in your trust document, but until you transfer your assets into it, your trust may be without complete purpose.
For more information on Losing Control Over Assets In A Trust In CA, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (714) 384-6500 today.