shapeType75fBehindDocument1pWrapPolygonVertices8;4;(21498,0);(0,0);(0,21494);(21498,21494)posrelh0posrelv0pib
Beneficiary transfers mq)' seem simple. But, here again, you can easilY lose control. 
Next, you 'illearn about a wq)' you can plan your estate that lvililet you keep control of all your assets while you are 
living, if you become incapacitated, and even after you die. 
m Keeping Control with A REVOCABLE LIVING TRUST 
There are several different kinds of trusts. 
An irrevocable trust is frequently used in tax planning. After it has been set up, you usually cannot 
change it or remove assets that have been transferred into it. 
A testamentary trust is created after you die by a provision in your will. It can be used in tax planning 
or to manage assets for minors or other beneficiaries. However, as we explained earlier, a testa- 
mentary trust does not avoid probate and it provides no protection if you become incapacitated 
because it is part of your will. 
The kind of trust we are discussing in this booklet is called a revocable living trust. (To keep things 
simple, we will often refer to it from now on as a living trust or trust.) 
What is a revocable living trust? 
A revocable living trust is a legal document that, like a will, includes your instructions for what 
you want to happen to your assets after you die. But, unlike a will, a living trust can avoid pro- 
bate at death. It can prevent the court from controlling your assets if you become incapacitated. 
And it can give you, not the courts, control of the assets you leave to your minor children and/ 
or grandchildren. 
How does a living trust avoid probate and prevent court control at incapacity? 
When you set up a living trust, you transfer assets from your individual name to the name of your 
trust, which you control-such as from "John and Mary Smith, husband and wife" to "John and 
Mary Smith, Trustees under trust dated (month/day/year of trust)." 
Technically,you no longer own anything, so there is nothing for the courts to control when you 
die or if you become incapacitated. The concept is very simple, but this is what keeps you and 
your family out of the courts-even if you own assets in other states. 
Do I lose control of the assets I put into my living trust? 
Absolttte!y not. You keep full control. As trustee of your trust, you can do everything you could 
do before, including buying, selling, investing, ete. You can make changes or even cancel 
your trust; that's why it's called a revocable living trust. In fact, the Internal Revenue Service 
considers putting assets in a revocable living trust to be a "non-event" because you can take 
them out at any time. Nothing changes but the names on the titles. And, as you'll see in the next 
few pages, you'll actually have more control with your assets in a living trust than you do now. 
How does a living trust work? 
When you set up a living trust, you become the grantor-the person whose trust it is. If you are 
married, you and your spouse can be co-grantors, or you can be grantors of your own separate 
trusts. Only you, the grantor, can make changes to your trust. That's how you keep control. 
You will need to name someone, called the trustee, to manage the assets in your trust. You can 
be your own trustee. If you are married, you and your spouse can be co-trustees. As long as you 
area trustee of your trust, you file the same income tax returns as you do now, using your own 
social security number. 
9