By establishing a living trust, Oklahoma individuals may be able to avoid the lengthy, public and expensive process of probate. Additionally, they can create a plan to handle disability and retain control over their assets so that they can use them during their lifetime. At the same time, they can prepare for the future and set parameters around how heirs should use assets and income from the trust.
Revocable trusts are established when a person executes a written trust agreement. This legal document states that the trust is being formed to hold specific property in it. The trust might describe the assets that are being used to open the trust or it may include a schedule that is attached to the trust. Additionally, the grantor can add assets or take assets out of the trust as he or she sees fit. The trust will also indicate who the beneficiary is. In many trusts, the grantor makes himself or herself the beneficiary. Successor trustees may also be listed, such as the grantor's children and grandchildren.
In order for the trust to be funded, the grantor must transfer title to the property. For example, he or she may execute a deed for real property that transfers the asset from the personal ownership of the grantor to the trust. While individuals may transfer the ownership of assets into the trust, they often retain control over the asset and the ability to use the property as they see fit. Due to this retention of control, the grantor is required to report income that he he or she derives from the trust on personal income tax returns. Once the grantor dies, the trustee distributes the property in the trust in accordance with its provisions.
An estate planning lawyer may be consulted by individuals who are considering a trust. Because certain legal provisions must be followed in order for the trust to be valid, it may be advisable to have such a professional draft the document.
Source: American Bar Association , "Living Trusts", November 02, 2014