Revocable Living Trust – A Revocable Living Trust is a substitute for a will, although a companion will accompanies almost every Revocable Living Trust. A trust is similar to a contract between the “settlor” (person creating the trust) and the “trustee” (person administering the trust) for the benefit of the beneficiary (person receiving the benefits from the assets of the trust).
Under California law a person may be the settlor, trustee and beneficiary of the same Revocable Living Trust.
The trustee administers and distributes the trust in accordance with its terms. The trustee is the legal owner of trust property (holds bare legal title in his or her name as trustee) but the beneficiary is the equitable owner (is owed all the benefits of ownership).
If a trustee dies or becomes incapacitated legal title passes to a successor trustee.
In general the trust can only be amended or revoked by the settlor, or someone empowered to act on the settlor’s behalf. However, there are some exceptions.
When instructed by its terms the trustee terminates the trust and distributes all of its assets. Because on distribution legal title passes from a living trustee to the beneficiary this process is not subject to probate administration and thus is not a matter of public record.
The benefits of a Revocable Living Trust are: in most instances there are less attorney fees incurred than with a formal probate because no court interaction is required; the time required to distribute the trust on the death of the settlor can be much reduced as compared to a formal probate; the terms of the trust do not become a matter of public record on the settlor’s death as with a formal probate. The primary disability of a Revocable Living Trust is that there is no court oversight of the actions of the trustee.