Successor Trustees & Beneficiaries

A Living Trust avoids probate because, unlike a Last Will and Testament, it is a fully effective document, which exists now, during your lifetime.  Equally important, your Living Trust continues to exist after death as a separate entity.  Since there is no probate, there are no fees to be paid to probate attorneys, executors, appraisers, Courts, etc.  Everything you leave goes directly to whomever you have chosen.

The Successor Trustee

The settlor is able to designate the person(s) who will administer the trust after he/she dies.  Called the “successor trustee,” this is the person on whom the settlor places the responsibility for managing and distributing the assets placed in the Living Trust.

Beneficiaries

You will designate in the Living Trust how you want your estate to be divided.  The person(s) named by the settlor to receive the assets after death are called the “contingent beneficiaries.”  When the settlor dies, the contingent beneficiaries are entitled to receive the settlor’s assets according to the wishes of the settlor.

Remember, you are entitled to make any kind of changes during your life.  This can include adding new beneficiaries, removing existing beneficiaries, changing the distribution of assets or even selling the assets and revoking the trust.

In the example below, Bill Brown established a Living Trust.  He will pay no probate fees and his estate will not go through probate because he created a Living Trust during his lifetime.

When Bill dies, his wife Jane takes over the administration of his trust because Bill designated Jane to be his “successor trustee.”  Bill also designated Jane to receive his assets after his death.  As the example illustrated, Jane is a “contingent beneficiary” of Bill Brown’s Living Trust.  Bill and Jane may have children.  As an alternative, it could be set up so that Jane receives all of the income for her life, and at her death, the remaining assets will be distributed equally among their children.

During his lifetime, Bill Brown is the only person who benefits from the trust.  At Bill’s death the designated successor trustee takes over and distributes the assets according to Bill’s wishes.