Living Trust Created during the settlor s lifetime Revocable Trust by PLeIE5

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									                           Trusts
           Legal Document
           “Settlor” or “Grantor:” Person who
            creates the trust
           “Beneficiary” or “Beneficiaries:” Person
            or persons who receive the income
            and/or principal from the trust
            “Trustee”: Person who manages the trust
            “Corpus”: Property transferred to the trust


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                        Living Trust
       Created during the settlor's lifetime
           Revocable Trust: Can be amended, revoked,
            terminated or changed at any time by the grantor
           Irrevocable Trust: If you transfer some or all of
            your property to an irrevocable living trust, you
            are giving up all your rights to that property




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                Testamentary Trust

       Created at death, usually in the Will
           Revocable up until the grantor dies
            (assumes competency at time of
            revocation)




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                               Trusts
            Advantages of a Trust:
             Privacy (not usually recorded)

             Avoids probate costs

             Lower risk of challenges

            Disadvantages of a Trust:
             Initial and continuing legal and accounting

              costs
             Management fees

             Must make decisions now


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Trust Beneficiary: Avoiding Inclusion
       in Beneficiary’s Estate
       Strategy: Restrict the beneficiary’s “outright
        control” of the trust corpus
       What are “limited strings of control” to avoid
        “outright control?”
           Beneficiary can use all the annual income
            Beneficiary can use up to 5% of the trust corpus
            annually for any purpose
           Beneficiary can use any amount of the trust
            corpus for her/his health treatment and ordinary
            living expenses
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