Set Up A Living Trust Overview
A Living Trust is set up when the Settlor (or Trustor), trust creator, executes a Declaration of Trust specifying and transferring property into the “trust res.” The trust document must specify a “Trustee” who will manage property for the benefit of the trustor. Finally, the trustee must specify beneficiaries.
When a trust names the Trustor or Settlor as sole trustee and sole beneficiary, legal and equitable title to property is said to have merged, and the trust no longer valid. Under California law, a trust providing for one or more successor beneficiaries after the death of the settlor shall not be invalid, merged or terminated where there is one settlor who is the sole trustee and sole beneficiary during the settlor’s lifetime.
A trust is considered a “Living” trust as it is created and takes effect during the lifetime of the Trustor. A testamentary trust is one that is recited in a will and which becomes effective when the Will is admitted to probate.
Property is transferred into the Living Trust for management. A Living Trust is a useful tool to manage one’s property and to avoid Probate court costs and expenses.