What Happens To My Trust When I Die

Limited Power Of Attorney Template - What Happens To My Trust When I Die

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Question: I have my bank accounts (Cd's Savings etc) in the __________ Revocable Trust. My self and my friend are trustees. If I die, does the Trust "disappear" and are my accounts automatically distributed to the surviving trustee or will the trust as a assessable entity still exist? M.N.

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Limited Power Of Attorney Template

Answer: Dear M.N. - The short talk to your inquire is, it depends upon what the trust instrument says.

Unfortunately, we often get caught up in the legal ramifications of a trust and lose track of the fact that it is nothing more than person keeping your asset for the benefit of person else.

The connection you create with a trustee is very much the same as the connection you create with a babysitter. For example, if you're going out for the evening, you might give your babysitter to take your kids to a movie and buy them some treats. In so doing, you've created a trust. You are the creator or "grantor" of the trust, your babysitter is the trustee, and your kids are the beneficiaries. Although this type of trust is of short period (maybe just a few hours) and consists of an oral trade with your babysitter - or, at best, a short note attached to the refrigerator, we all know that the doesn't belong to the babysitter. The babysitter is plainly keeping it for the benefit of your kids as you instructed. In fact, you probably told the babysitter what movie to take the kids to and what refreshments the kids could have. If you're like most parents, you probably left some pretty detailed instructions as to what the babysitter could or could not do with the .

While we understand the babysitter connection very well, we often fail to understand the same basic relationships when we're talking about estate planning and the use of a revocable living trust. Perhaps it's the legal terminology, or maybe it's the fact that we're talking about a field that we'd just as soon avoid. Anything it is, we often fail to identify that a trust is nothing more than a note to our babysitter - only this time we're not talking about giving person a few bucks to entertain the kids for the evening, we're talking about giving person all of our asset for the benefit of our loved ones after we're gone. It's basically the same - just more permanent!

That being the case, there is well no calculate why Anything with a trust (or a will for that matter) doesn't know exactly what the trust (or the will) says. It's your note to your babysitter. You're the boss! The trustee is plainly carrying out your instructions. However, since you're not likely to be nearby when the trustee has to carry out his instructions, you should furnish as much information as potential in your trust instrument. As for the trust, it will continue for as long as the trustee is keeping any of your property. As soon as it's all distributed to your beneficiaries, the trust will end because your trustee's job is over. If your beneficiaries are older, that might be just a few months after your death. If your beneficiaries are younger and you want your trustee to hold your asset until they get older, then the trust might last for any estimate of years after your death.

So, M.N., the first thing you need to do is take a close look at your trust instrument to see what it says. That's your note to your babysitter. Don't get bogged down by all the legalease - go right to the part that talks about your asset and how it will be distributed upon your incapacity or death. That part should be simple and understandable. If you don't like what it says or if you want to say something different, then you need to turn it. At the very least, you have to understand what it says and you have to agree with it.

Finally, remember that you're creating a trust. It's called a trust because you're "trusting" person to hold and conduct and distribute your asset according to your wishes when you can't do it on your own. But, as we all know, "trust" only goes so far. For that reason, we also need to insure that our connection with our trustee will have the full retain of the law. After all, we're not going to be nearby to inflict the trade if the trustee goes astray. That's where good estate planning attorneys can help. They've been there, they've done that, and they know how to preclude those things from happening. Yes, it will cost a few bucks to have an attorney cross the i's and dot the t's - and you might not know why or wherefore. But, you should bite the bullet and get it done. You may not sleep any better, but your loved ones will!

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