Question

Mark the three choices that are true of a living trust.

Answer 1

When the minor children reach a certain age, the living trust is always discontinued: FALSE
A living trust is established while the owner of the property or money put in trust is still alive.TRUE
The estate is managed, invested, and controlled by the trust agency or person.TRUE
The profit is paid to the owner during his lifetime, and to whomever he names upon his death. TRUE

Answer 2

Answer:

• When the minor children reach a certain age, the living trust is always discontinued. F

• A living trust is established while the owner of the property or money put in trust is still alive.T

• The estate is managed, invested, and controlled by the trust agency or person.T

• The profit is paid to the owner during his lifetime, and to whomever he names upon his death. T

Explanation:

A living trust is a type of trust created during a person's life. It is designed to allow the easy transfer of the assets of the creator of the trust, while avoiding the legal process of succession, often complex and expensive. Living trust contracts designate a trustee who has legal possession of the assets and properties that flow into the trust.

A living trust is in effect while the trustor is alive and the trust does not have to authorize the courts to reach their intended beneficiaries when the trustor dies or becomes incapacitated.

Probate trusts may be irrevocable or revocable.

With a revocable trust in life, the trustor of the trust can designate himself as a trustee and take control of the assets within the trust.

With a trust in irrevocable life, the settler waives certain rights of control over the trust. The trustee effectively becomes a legal owner, but the individual would also reduce his taxable assets. Once the trust agreement for an irrevocable living trust is made, the named beneficiaries are established and the settlor can do little to amend that agreement.