Living Trust Terms
Updated: Jan 25
Many out of the ordinary terms appear in the world of the Living Trust. Here’s a guide to help you get your feet wet in the terminology of the Living Trust world and enter that first meeting with an estate planning attorney with confidence
Three major terms that appear when talking about a Living Trust are “settlor,” “trustee,” and “beneficiary.” This is because to create a Living Trust the settlor transfers his or her property to a trustee who, in turn, holds that property for the benefit of another: the beneficiary.
So, who is the settlor?
The settlor is simply the person whose property funds the Living Trust. If you’re reading this article because you have a Living Trust or think you might need one, the settlor is you.
Next, who is the trustee?
The trustee is the person that holds legal title to property placed in the Living Trust. While the settlor is alive and has capacity, the trustee is usually the settlor. This means that when you create a Living Trust, you are transferring property to yourself, just wearing a different hat.
So... what’s the point?
Well, one of the main benefits that comes from having a Living Trust is that when the settlor creates the Trust, he or she names a successor trustee. When the original trustee passes away, the successor trustee can take ownership of the property in the Living Trust in a few simple steps, and most importantly, without probate.
And finally, who is the beneficiary?
Put simply, the beneficiary is the person who benefits from the Living Trust. During your lifetime, usually that person will, again, be you. So, while you are alive and have capacity, you will probably be the settlor, the trustee, and the beneficiary of your Living Trust.
The time when beneficiaries usually become important in your Living Trust is after you pass away. This is because a typical Living Trust will instruct the successor trustee to distribute property to certain beneficiaries upon the settlor’s death. In this way, the Living Trust becomes an estate plan, distributing your property according to your wishes.
Although this is not a complete guide to all Living Trust terminology, hopefully it will give you some confidence going into an estate planning meeting. To find out whether a Living Trust might be the right estate planning tool for you, read more here. Or contact us!
The information in this blog is intended only as general information, and under no circumstances constitutes legal advice, nor does it create an attorney-client relationship. The information should not be relied upon as a substitute for specific legal advice concerning your particular situation.
For advice specific to your situation, contact us to schedule an appointment.
About the Koons & Riswold Law Office
Koons & Riswold maintains an office in Davis, CA and Auburn, CA to provide clients with legal services in Auburn, Davis, and the surrounding areas. Our Auburn and Davis lawyers provide legal services, which include: Living Trust and Estate Planning services, Probate, Elder Planning, and Trust and Estate Administration. Our lawyers have deep roots in Northern California, having strong familial, community, and professional ties to the region.