This section is the location to view up-to-date changes to current law and the legal ramifications of those changes. We encourage you to examine this section often for updates and to review the “Frequently Asked Questions” in the following section. Our staff is available to assist you with other questions and issues.

Frequently Asked Qustions

What is a Trust Agreement?

A trust agreement is a contract between the grantor/settlor and the trustee. The Grantor/settlor delivers assets to the trustee. The trustee has agreed to do certain things with the assets–invest the assets, distribute monies to the beneficiaries of the trust. The trust agreement has been prepared for your are specifically known as an intervivos revocable trust agreement. Said another way, it is a trust created during the lifetime of the settlor/grantor and may be revoked, altered and amended by the grantor/settlor.

Who is a Beneficiary?

A beneficiary is a person who will receive either income or the principal or corpus of the trust.

Does a Trust avoid Probate?

The creation o f a trust agreement and the transfer of property into it establishes a separate entity from you. It is a contract with the trustee to perform certain acts. Therefore, the entity (the trust agreement) does not die at your death, the obligation of the successor trustee continues. If you are the trustee, and you would no longer be able to continue to perform the functions as trustee, the successor trustee would assume the duties.

Does a Trust avoid Guardianship procedures in the event of incompetency?

One of the benefits of the trust is that if you become incapacitated or simply desire to relinquish control of the assets of the trust, you may resign as trustee of the trust and the successor trustee will assume the role as trustee. This allows the continuation of the management of the assets in times of emergency without the intervention of formal judicial proceedings.

Does a Trust avoid Estate Taxes?

The use of this type of grantor trust does not avoid any income or estate taxes, but postpones estate tax. The assets of the trust are taxed as if the grantor has not transferred the assets. The purpose of the instrument is to provide for the management and control of the assets through difficult times and for the distribution of the assets upon your death to the beneficiaries named in the trust without the expense and time of Probate proceeding.

What is a Revocable Trust Agreement?

The revocable trust to be executed by your provides that • you are your own trustee • you are the beneficiary during your lifetime • you may revoke or amend it at any time during your lifetime and so long as you are mentally competent to do so • your trust agreement provides that the trust becomes irrevocable upon the death or disability of either of you.

What is the purpose of the Trust Agreement?

The primary purpose of the agreement is to provide a means to manage your affairs and to avoid the probate of your assets. The legal theory behind the trust is that you have divided duties and functions. The trustee manages the assets. The assets are owned by the trust itself and you are the beneficial owner of the assets during your lifetime. Upon your death, the successor trustee will continue the terms of the trust. The successor trustee is directed to make distribution to the named beneficiaries. The trust provides a collateral benefit. It allows you to select the person you want to manage your affairs in the event you are disabled, physically or mentally. The management would be without court supervision and the costs related to the court supervision. There would be a continuing obligation of distribution from the trust and the trustee is required to maintain good records and furnish the beneficiaries with periodic accountings.

What is your Tax Identification Number?

You may use your own social security number for the trust as long as you are the trustee. If the successor trustee begins to function as the trustee, a form SS-4 must be filed with Internal Revenue Service to obtain a separate Federal Tax I.D. number. The forms may be obtained through my office or through your accountant.