To dissolve the mystery surrounding the word “Trust”, the following definition will be helpful – Trusts are in essence private contracts that are developed by an individual or couple for some specific purpose, usually for probate avoidance, estate tax planning and reduction, asset protection, gifting, special needs planning, behavior modification, control, and other purposes. Trusts are either revocable (the Trust can be revoked or terminated, or amended or restated) or irrevocable (the Trust cannot be revoked or terminated or amended or restated, unless modern techniques such as the use of Trust Protectors or decanting powers are used.
The most common and well-known of all Trusts, the Revocable Living Trust, is a probate avoidance device that allows clients to choose the private administration of their estate instead of the Will-based plan that is subject to the probate process. Revocable Living Trusts avoid probate only if the Trust is properly funded after execution. Since the funding process is of paramount importance, Elville & Associates has a Funding Coordinator, Mary Guay Kramer, who is assigned the task of ensuring that all estate plans are properly funded. A complete Revocable Living Trust-based plan will consist of the following documents: (1) Revocable Living Trust, (2) Pour-over Will, (3) Assignments of Tangible and Intangible Property, (4) Power(s) of Attorney, and (5) Advanced Medical Directive. Revocable Living Trusts, by their very nature, are of limited use and benefit if not properly funded, so a thorough understanding of the trust funding process and asset titling is essential to an understanding of the role the Revocable Trust plays in the estate planning process.