In order to fully explain the benefits associated with a trust, it is important to understand what exactly a trust is and how it works. First, the name itself often times you’ll hear the term “living trust” or “revocable trust”.
These terms are synonymous and mean the same thing. Living trust simply means the trust takes affect during your life, whereas revocable simply means that the trust can be revoked or cancelled at any time. Whether it is called living or revocable trust, in either case it works the same and the benefits and advantages of it are the same.
A trust is a separate entity, which means it can own assets and property just like you can as an individual. The assets and property owned by the trust are managed by a trustee. The person(s) who are entitled to receive the property owned by the trust are the beneficiaries. With a living trust, you will simply name yourself and/or spouse as trustee. You will be named the beneficiary. This basically means you control your money and property and you can spend it for the benefit of yourself. A trust is as simple as that, you control your own property. The only difference is that the trust is the owner of the property. For ease, I recommend that clients use their own name when naming their trust. For example, if I have a client named Joe Smith, then his trust will be called the “Joe Smith Trust”. So while a trust may seem to be complicated, it is simple to manage and doesn’t affect how you use your property.