If you are hoping to build generational wealth for your family, setting up a trust may be in your best interest. There are several different types of trusts, but revocable trusts are some of the most common. With a revocable trust, the person who sets up the trust, known as the “grantor”, “settlor”, or “trustor” will retain the right to terminate or modify the trust at any point while they are still living.
However, understanding who controls the property in a trust after you pass away, what your responsibility is as the grantor, and how to manage your trust should be a top priority. Fortunately, you can get help protecting your interests and ensuring your trusts are set up as you intended when you have a reputable estate planning attorney working for you. Here is more about who controls the property in a trust and how trusts are managed.
What Is a Trust?
There are several different types of trusts. One of the most common trusts families take advantage of is revocable trusts. A revocable trust is set up by the “grantor”. Certain assets are placed into a trust to be transferred to the grantor’s beneficiaries upon their passing. The grantor can make changes to the trust and will maintain control over the assets within the trust during their lifetime. A trustee manages the trust on behalf of the grantor for the benefit of the trust’s beneficiaries.
Roles and Responsibilities in Trusts
There are several parties who have crucial roles when it comes to trusts. There is the grantor, the trustee, and the trust beneficiaries. Here is more about each of these roles and the responsibilities that these parties hold:
The Grantor
The grantor is the party who created the trust. The grantor decides which assets or property should be transferred into the trust. The grantor set up the trust as part of their estate plans and has the authority to modify or terminate the trust at any point during their lifetime. The grantor will be responsible for assigning a successor trustee. While the successor trustee will be responsible for transferring ownership upon death, the grantor remains in full control of the trust until their passing.
The Trustee
The successor trustee is responsible for managing the trust assets and ensuring they are transferred to beneficiaries as described in the trust agreement. While the grantor will typically act as the trustee while they are alive, if they become incapacitated or die, the successor trustee takes over management of the trust. This can be anyone the grantor selected prior to their incapacitation or death, such as a family member, professional fiduciary, estate planning lawyer, or friend.
The Beneficiaries
Beneficiaries are those who receive the assets contained within the trust after the grantor dies. These can also include anyone the grantor has named in their trust documents, including spouses, children, grandchildren, friends, or even charitable organizations. Beneficiaries do not have any control over the assets within the trust while the grantor is still alive. The trust terms determine how and when the beneficiaries will receive these assets. Beneficiaries also have specific rights, including:
- The right to information about the decedent’s estate administration
- The right to updates as to the status of the estate administration
- The right to remove or suspend the administrator of the estate
- The right to review the grantor’s will
- The right to assets left to them
- The right to challenge the distribution process
- The right to a detailed accounting
- The right to petition the court when the transfer of assets is delayed
Trust Management FAQ
Who Owns the Property in a Trust?
When assets are placed in a trust, the trust is the legal owner of the property as though the trust was the actual person who purchased the asset as described by Nevada Revised Statute 0.039. However, the grantor will remain in control of the assets while they are still alive. This means they have the authority to alter, sell, or buy property. The grantor will be responsible for managing the assets and any tax implications associated with the trust. The successor trustee will take control over the trust once the grantor becomes incapacitated or dies, at which point, beneficiaries will be transferred ownership.
What Are the Steps for Managing Property in a Trust?
To manage the property in a trust, the grantor must choose a trustee. Typically, grantors will handle the management of the trust while they are still living. Not only does the successor trustee need to be selected, but the trust documents must be created and property must be transferred into the trust.
Once the trust has been funded, real estate, property, and other investments must be managed as outlined in the trust agreement. Then, once the grantor passes away, the successor trustee is responsible for ensuring the assets outlined in the trust are distributed to beneficiaries. Beneficiaries must then be notified of their right to the assets within the trust. The successor trustee is required to act in the best interest of the trust and beneficiaries at all times.
Are Beneficiaries Usually Named as the Successor Trustees?
Successor trustees can also be named as beneficiaries. For example, you might set up a trust and name your adult child as a successor trustee and beneficiary. This helps to ensure the administration of your trust is in line with your family’s best interest. Selecting the right successor trustee is one of the most important decisions to make when setting up your trust.
Contact Our Highly Experienced Estate Planning Lawyers Today
While the grantor will remain in control of and own the rights to the trust until their death, the successor trustee, beneficiaries, and legal representatives must ensure the trust is managed and maintained during the grantor’s lifetime. This will help to ensure beneficiaries receive the assets contained within the trust when you pass away without having to go through probate.
If you are interested in setting up a revocable trust or ready to learn more about other types of trust that may be a better fit based on the circumstances of your case, do not hesitate to contact our dedicated estate planning attorneys from Beckstrom & Beckstrom. Reach us by phone or through our secured contact form to schedule your confidential consultation as soon as today.
