My clients often ask me, “If I create a Living Trust, will I give any control over my assets.”
When you create a Revocable Family Trust (which is what most clients do), you do not give up any control. Here is the reason why:
A Trust is a piece of paper (a contract) and has 3 parties. The person who creates the Trust is known as the Settlor, the person who manages the Trust is known as the Trustee, and the person who receives the benefit is the beneficiary. When an individual or married couple establishes a Trust, they are the creator and the manager and the beneficiary — wearing all 3 hats.
As manager of your own Trust you can still do whatever you want with your assets:
- sell them
- give them away
- rent them
- borrow against them
Anything and everything that you can do as an individual owner you can do as a Trust owner.
A Revocable Living Trust is really a “legal fiction” designed to avoid probate, provide management and minimize taxes and other costs of dying.
In fact, the IRS disregards it all together and you report your income taxes under your social EXACTLY as you do before you establish a Living Trust. Revocable Living Trusts are established every day by thousands of Americans without any loss of control in how you can manage and control your own assets.