So let's talk about the four major tools in the toolbox. The first major tool is called "the living trust". And again, please understand this just general information- it may not apply to your situation, but it applies to many folks. So the living trust is the first major tool. It is the hammer in the toolbox, if you continue with that analogy. There are three major cast members, if you will, of the living trust. The first cast members are called the "settlors". The settlors are the people who create the living trust.
In some older documents you might see terms like "grantors", "trustors"- the more modern term that we see these days is "settlors". The next cast member of the living trust are the "trustees". These are the people who manage the trust. So everything inside the box is managed by the trustees of the trust. And the next, final and third are the "beneficiaries". The beneficiaries are the third cast member, and these are the people who benefit from the trust. Now initially, the persons who set up the trust are often occupying all three roles- in fact, it is usually the case. They create the trust, they're their own trustees and they're their own beneficiaries.
Now, let's move along. What are the main benefits of this living trust? What are the main benefits? And I tell clients that there are generally three main benefits to having this tool in your toolbox. The first one is, everything in the name of your trust avoids the court system. So if you put something in the name of your trust, and that's the key here, you must put it in the name of your trust. Therefore that asset will not go through the court system after you pass away. The second benefit is that anybody that you've listed as your trustee, your successor trustees, they can manage what's in the toolbox- I'm sorry, what's in the living trust.
Everything in the trust is managed by your trustees, the people you choose in advance, not anybody who wants the job. And finally, everything in the name of your trust is governed by the rules of your trust. So if an asset is in the name of the Smith family trust, for example, that asset is governed by whatever the Smith family trust says.
Call our office today at (661) 414-7100 to see if we can assist you with your estate plan. Remember, a living trust is only one tool in the estate planning toolbox.