You’ve probably heard the term “living trust.” But what is a living trust and how does it work?
A living trust is a legal entity that can own property on behalf of a “beneficiary” and is managed by a “trustee” who must follow instructions set out in the “trust agreement.” Typically, you name yourself as both trustee and beneficiary of your living trust and change the ownership of your property and assets from you as an individual to your living trust. Then you, as the trustee, manage the trust property for the benefit of you as the beneficiary of the trust. If another person is named the trustee, that person does not own the trust’s property and must make decisions in the best interest of the beneficiary.
A key advantage of a living trust is the ability to name a successor trustee who can step in and manage the trust if circumstances arise that make it unwise or impossible for you to continue to manage your financial affairs. Another advantage comes at the end of your lifetime when your successor trustee can distribute your money and property, thus avoiding the delay and expense of a court probate.
Consult your own advisors to determine whether a living trust is right for you. And remember to consider including a legacy gift for Baystate Health Foundation in your living trust or will to support lifesaving and life-enhancing care.