Give an account of the funding and operation of a living trust

Question

What will be an ideal response?

Answer 1

To fund a living trust, the grantor transfers title to his or her property to the trust. This property is called the trust corpus. Bank accounts, stock certificates, real estate, personal property, intangible property, and other property owned by the grantor must be retitled to the trust's name. For example, the grantor must execute deeds transferring title to real estate to the trust. Once property is transferred to the trust, the trust is considered funded. A living trust is revocable during the grantor's lifetime. Thus, a grantor can later change his or her mind and undo the trust and retake title of the property in his or her own name. A living trust names a trustee who is responsible for maintaining, investing, buying, or selling trust assets. The trustee is usually the grantor. Thus, the grantor who establishes the trust does not lose control of the property placed in the trust and may manage and invest trust assets during his or her lifetime. The trust should name a successor trustee to replace the grantor-trustee if the grantor becomes incapacitated or too ill to manage the trust.