Revocable Living Trust

One person creates the trust for his or her lifetime use, then to the beneficiaries named in the trust.

H & W for their lifetime use, then to others. When a spouse passes away, the surviving spouse receives the deceased spouse’s portion of the property. When the surviving spouse passes away, then to the beneficiaries named in the trust. H & W for their lifetime use, then two trusts created until surviving spouse’s death, then to others (A-B Trust) Husband and wife (or domestic partners) create a trust for their lifetime use. When a spouse passes away, the trust property is split into two portions. The surviving spouse receives the deceased spouse's portion of the property with no restrictions. The surviving spouse will be able to use the deceased spouse's portion of the property. However, when the surviving spouse passes away, that property must go to the beneficiaries named by the other spouse.

One person creates a trust with another person for their lifetime use, then to the beneficiaries named in the trust. The other person may be a family member, domestic partner, friend, etc. This person will be called a Co-Grantor.

Another type of trust is an “irrevocable” trust, where the assets in it are no longer yours, but the appreciated assets in the trust are not subject to estate taxes.

Two people serve as co-trustees of the trust, simultaneously, or one person serves as successor trustee and if they cannot or will not serve, then the named alternate successor trustee serves.

Three people serve as co-trustees of the trust, simultaneously, or two people serve as successor trustees and if both of them cannot or will not serve, then the named third alternate successor trustee serves.

A “minor’s trust” is a ‘sub trust’ that leaves property to a minor child, but in the care of a trustee, until the child reaches a designated age, often age 18, 21, or 25. The minor’s trust may specify that trust funds may only be used for specific purposes, such as education, or medical expenses, particularly in instances where a minor has a disability or illness. When the child reaches the age stated by the trust, the trustee will then transfer property from the minor’s trust to the beneficiary outright, including any income the trust has produced.

Three basic types of gifts given through a trust are a Specific Gift, a General Gift and a Residuary Gift. A specific gift includes details so it's very clear what property is being given away and to whom. An example of a specific gift states that "Bob Jones receives all of my furniture." A specific gift is given to the recipients before general and residuary gifts are distributed from the estate. A general gift isn't described precisely enough to distinguish it from the rest of the property. For example, “Bob Smith receives a computer”, is a general gift if you own more than one computer, since it is unknown which computer is being given. A residuary gift is the property that remains, or is leftover, after the specific and general gifts are distributed. For example, the residuary gift might state: "The rest of my property goes to my daughter, Nancy".

A beneficiary named in a trust may die before the Trust Grantor dies, and the gift to that beneficiary must go elsewhere. Commonly, the trust either names the child or children of the deceased beneficiary as the “alternate beneficiary(ies)” that will receive that gift, or that the deceased beneficiary’s gift will be split equally among the surviving beneficiaries.Describe how you would like a gift to a predeceased beneficiary to be distributed when it is not given to the predeceased beneficiary’s children or to the surviving beneficiaries of the trust.

A “minor’s trust” is a ‘sub trust’ that leaves property to a minor child, but in the care of a trustee, until the child reaches a designated age, often age 18, 21, or 25. The minor’s trust may specify that trust funds may only be used for specific purposes, such as education, or medical expenses, particularly in instances where a minor has a disability or illness. When the child reaches the age stated by the trust, the trustee will then transfer property from the minor’s trust to the beneficiary outright, including any income the trust has produced.

Three basic types of gifts given through a trust are a Specific Gift, a General Gift and a Residuary Gift. A specific gift includes details so it's very clear what property is being given away and to whom. An example of a specific gift states that "Bob Jones receives all of my furniture." A specific gift is given to the recipients before general and residuary gifts are distributed from the estate. A general gift isn't described precisely enough to distinguish it from the rest of the property. For example, “Bob Smith receives a computer”, is a general gift if you own more than one computer, since it is unknown which computer is being given. A residuary gift is the property that remains, or is leftover, after the specific and general gifts are distributed. For example, the residuary gift might state: "The rest of my property goes to my daughter, Nancy".

A beneficiary named in a trust may die before the Trust Grantor dies, and the gift to that beneficiary must go elsewhere. Commonly, the trust either names the child or children of the deceased beneficiary as the “alternate beneficiary(ies)” that will receive that gift, or that the deceased beneficiary’s gift will be split equally among the surviving beneficiaries. Describe how you would like a gift to a predeceased beneficiary to be distributed when it is not given to the predeceased beneficiary’s children or to the surviving beneficiaries of the trust.

An executor is a person or institution appointed by a testator to carry out the terms of their will. The executor is responsible for gathering up and protecting the assets of the estate, obtaining information in regard to all beneficiaries named in the will and any other potential heirs, collecting and arranging for payment of debts of the estate, approving or disapproving creditor's claims, making sure estate taxes are filed, and tax payments made, as well as other probate-related items.

A guardian is often an adult that can make legal decisions for children who are not their own, and may care for them, just like a parent would. The guardian is usually named in one’s will to take charge of minor children in case of the death of the parent(s). If more than one guardian is named, they are called joint guardians.

An executer is a person or institution appointed by a testator to carry out the terms of their will. The executor is responsible for gathering up and protecting the assets of the estate, obtaining information in regard to all beneficiaries named in the will and any other potential heirs, collecting and arranging for payment of debts of the estate, approving or disapproving creditor's claims, making sure estate taxes are filed, and tax payments made, as well as other probate-related items.

A guardian is often an adult that can make legal decisions for children who are not their own, and may care for them, just like a parent would. The guardian is usually named in one’s will to take charge of minor children in case of the death of the parent(s). If more than one guardian is named, they are called joint guardians.

An agent or “attorney in fact” is a person, named in a power of attorney document, who is authorized to perform business-related transactions on behalf of someone else, usually called the “principal”. The person you choose as your agent should know that he or she has a duty of trust and must always act in your best interests.

Check each power you would like to give your agent. A general power of attorney gives broad powers to a person or organization (known as an agent or attorney-in-fact) to act in your behalf. These powers include, among others, buying life insurance, settling claims, operating business interests, opening and closing bank accounts, withdrawing funds, trading stocks, and paying bills.

An agent is generally not allowed to commingle (mix) the principal’s funds or property with the agent’s own funds or property, and must keep them separate. However, you may wish to specifically authorize your agent to commingle funds, if for example, you appoint your spouse or partner as agent, and your finances are already thoroughly mixed together in joint bank accounts.)

The agent must be loyal to the principal and deal honestly within the boundaries of the power of attorney relationship. The agent cannot engage in self-dealing practices, especially if those acts would not be in the principal’s best interests. However, in some circumstances, the power of attorney may specifically grant the agent permission to benefit from transactions carried out under the power of attorney, such as where the agent is the principal’s spouse, a close family member, a business partner, or other person whose affairs are already intertwined.

Generally, agents are entitled to reasonable compensation and to reimbursement for reasonable out-of-pocket expenses incurred on behalf of the principal. However, in family situations, an agent is normally not paid if the duties are not complicated or time-consuming. If the agent is to be paid, include the payment arrangement in the power of attorney.

Generally, agents are not liable to the principal, his or her estate, heirs or other parties in interest, for any action taken or not taken under a power of attorney, except for willful misconduct or gross negligence.

A “durable” power of attorney is a power of attorney that remains in full force and effect even if the principal can no longer make decisions for himself. Most powers of attorney are durable.

When two or more persons are appointed agents, they are known as co-agents. The power of attorney states whether they can either act independently or whether they must act together. If they are to act together, the manner in which disputes should be resolved, can be described in the “Special Instructions – Other” field, below.

Describe your own restrictions or additions to any of the powers granted to the agent. For example, if a power listed seems too broad, add limits to it, such as “My agent shall have no authority to sell, transfer, or otherwise encumber my business, Ajax Trucking Co.”

A Power of Attorney can take effect immediately upon signing or at some time in the future (known as a “springing” durable power of attorney). The future time may be a specific date or an occurrence of some event, such as a decision by a doctor that the principal is mentally incompetent and unable to make decisions on his or her own. Commonly, a specific doctor is named to determine mental incompetence, or that two licensed physicians agree the principal is mentally incompetent.

A durable power of attorney continues even when the principal becomes incapacitated, but it automatically ends when the principal dies. The power of attorney can also state that it will end at a specific time. Furthermore, the principal can revoke a power of attorney at any time, so long as he or she is mentally competent to do so.

An agent or “attorney in fact” is a person, named in a power of attorney document, who is authorized to perform business-related transactions on behalf of someone else, usually called the “principal”. The person you choose as your agent should know that he or she has a duty of trust and must always act in your best interests.

Check each power you would like to give your agent. A general power of attorney gives broad powers to a person or organization (known as an agent or attorney-in-fact) to act in your behalf. These powers include, among others, buying life insurance, settling claims, operating business interests, opening and closing bank accounts, withdrawing funds, trading stocks, and paying bills.

An agent is generally not allowed to commingle (mix) the principal’s funds or property with the agent’s own funds or property, and must keep them separate. However, you may wish to specifically authorize your agent to commingle funds, if for example, you appoint your spouse or partner as agent, and your finances are already thoroughly mixed together in joint bank accounts.

The agent must be loyal to the principal and deal honestly within the boundaries of the power of attorney relationship. The agent cannot engage in self-dealing practices, especially if those acts would not be in the principal’s best interests. However, in some circumstances, the power of attorney may specifically grant the agent permission to benefit from transactions carried out under the power of attorney, such as where the agent is the principal’s spouse, a close family member, a business partner, or other person whose affairs are already intertwined.

Generally, agents are entitled to reasonable compensation and to reimbursement for reasonable out-of-pocket expenses incurred on behalf of the principal. However, in family situations, an agent is normally not paid if the duties are not complicated or time-consuming. If the agent is to be paid, include the payment arrangement in the power of attorney.

Generally, agents are not liable to the principal, his or her estate, heirs or other parties in interest, for any action taken or not taken under a power of attorney, except for willful misconduct or gross negligence.

A “durable” power of attorney is a power of attorney that remains in full force and effect even if the principal can no longer make decisions for himself. Most powers of attorney are durable.

When two or more persons are appointed agents, they are known as co-agents. The power of attorney states whether they can either act independently or whether they must act together. If they are to act together, the manner in which disputes should be resolved, can be described in the “Special Instructions – Other” field, below.

Describe your own restrictions or additions to any of the powers granted to the agent. For example, if a power listed seems too broad, add limits to it, such as “My agent shall have no authority to sell, transfer, or otherwise encumber my business, Ajax Trucking Co.”

A Power of Attorney can take effect immediately upon signing or at some time in the future (known as a “springing” durable power of attorney). The future time may be a specific date or an occurrence of some event, such as a decision by a doctor that the principal is mentally incompetent and unable to make decisions on his or her own. Commonly, a specific doctor is named to determine mental incompetence, or that two licensed physicians agree the principal is mentally incompetent.

A durable power of attorney continues even when the principal becomes incapacitated, but it automatically ends when the principal dies. The power of attorney can also state that it will end at a specific time. Furthermore, the principal can revoke a power of attorney at any time, so long as he or she is mentally competent to do so.