Revocable Living Trusts
- A living trust is created when you sign & notarize the trust document. If the living trust has “sub-trusts,” or trusts within the main trust, those are also created when you sign the initial living trust document.
- You will “fund” your living trust as soon as you can after signing to move assets from your name to the name of your living trust. This may involve transferring real estate to your trust, opening trust accounts, or naming your living trust as the beneficiary at banks or financial institutions, or retitling other assets in the name of your trust.
- The sub-trusts although 'created', they will not be funded until you pass away, at which time your successor trustee will transfer the trust assets from the name of the main trust to the sub-trusts as directed by the trust document. The main trust document can be used to provide banks or financial institutions with information about the trust and identify the trustees. For convenience, the trustee can create a simple Trust Certification for the sub-trust which may be accepted by county clerks, DMV, banks, or financial institutions.
- Your Revocable Living Trust will often work with a “Pour-Over Will,” which is a Will that leaves any assets that remain in your name when you pass away to your Revocable Living Trust. If you have transferred all of your probate assets to your Revocable Living Trust prior to your passing, your Pour-Over Will likely won’t be used to perform any transfers; however, it might contain information about guardianship for minor children.
Testamentary Trusts
- A testamentary trust is a trust the terms of which are set out in a Last Will and Testament. While the terms of the trust are set forth in your Will, the testamentary trust is not “created” until you pass away. If the testamentary trust has “sub-trusts” or trusts within the main trust, those are also created when you pass away.
- There is no separate trust document with a testamentary trust. The entire trust and all of its sub-trusts are contained in your Will. The Will can be used to provide banks or financial institutions with information about the trust and identify the trustees. For convenience, the trustee can create a simple Trust Certification for the sub-trust which may be accepted by county clerks, DMV, banks, or financial institutions.
- Your testamentary trust will be funded through the probate process. Your executor will transfer your estate assets to the trust and then the trustee will take over managing them for the beneficiaries of each sub-trust.