Family Living Trust

A family Living Trust is a revocable trust setup to avoid the expensive and lengthy probate court process. It also serves as a repository for several legal documents such as Will, Power of Attorney, Medical Directive, etc.

The basic principles of an Estate Trust are explained in our blog “What is an Estate Trust?” A family Living Trust is a revocable trust whose provisions or terms can be changed anytime. This trust provides the estate a legal shield from the probate process when the Grantor passes away. However, the trust is still part of the estate and, hence, is not protected from creditors and does not reduce the estate tax.

A Living Trust is setup when a Grantor transfers assets to a Revocable Trust, appoints a Trustee and a Successor Trustee, and names the beneficiaries. The Trustee manages the Trust, its investments and operations. The Grantor can name himself as the Trustee as well as the beneficiary.

Setting up a basic Living Trust with help from an attorney could cost about a thousand dollars. As part of the service, the attorney would typically take care of changing any real estate title from the Grantor’s name to that of the Trust in the county recorder’s office.

The Living Trust is also a repository for several legal documents such as:
Will for the distribution of assets to beneficiaries
Power of Attorney if the Trustee becomes incapacitated
Beneficiaries for passing on the estate
Medical Directive including DNR (Do Not Resuscitate) preference
Guardianship for the care of minor children
Business Succession Plan for passing on business interests

The biggest benefit of a Living Trust is that it helps to avoid the costly (1-2% of the estate) and lengthy (1-2 years) probate court process. As a result, the family affairs are kept private, assets are distributed seamlessly to the heirs and a conservatorship is avoided if the Grantor becomes incapacitated.

Planning for estate taxes for high-net-worth individuals by setting up more advanced Trusts is discussed in detail in our blogs “Irrevocable Life Insurance Trust (ILIT)” and “Charitable Remainder Trust (CRT).”

We specialize in tax-free retirement strategy and investments such as IUL, Annuity and LTC. Prefer a quick and complimentary consultation? Just email us at

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