revocable-living-trust

# Revocable Living Trust

Drafts a revocable living trust preserving grantor control during lifetime with seamless asset transfer at death, tailored to applicable state law.

## Prerequisites

Gather before drafting:

- **Grantor(s)** — full legal name, address, state of residence, marital status, individual vs. joint trust
- **Beneficiaries** — primary/contingent names, relationships, distribution preferences (per stirpes/per capita), minor age restrictions
- **Assets** — real property (legal descriptions, APNs), financial accounts, business interests, significant personal property
- **Trustees** — initial, successor (first/second/third), co-trustee arrangements, corporate trustee preferences
- **Distribution plan** — specific bequests, age-based schedules, outright vs. continued trust, spendthrift needs
- **State requirements** — execution formalities, community property vs. common law, applicable trust code

## Document Sections

### 1. Declaration of Trust

Include: trust name (grantor name + year, e.g., "The John Smith 2026 Revocable Living Trust"), grantor full legal name and address, effective date, initial trustee (typically grantor; both spouses for joint trusts), trust type (individual/joint with explicit revocability statement), capacity statement, primary purposes (lifetime management + death distribution), governing jurisdiction.

### 2. Trust Property and Funding

Attach asset schedule as exhibit, organized by category: real property (legal description, APN, address), financial accounts (bank, brokerage, retirement — flag qualified plan restrictions), business interests (entity name, ownership %, type), personal property (vehicles, valuables), and future funding language permitting ongoing additions without formal amendment.

### 3. Trustee Provisions

Define succession chain (initial → first/second/third successor or corporate trustee). Address:

- Incapacity definition and physician certification standard
- Triggering conditions: death, resignation, incapacity, removal
- Co-trustee decision-making protocol (if applicable)
- Written acceptance requirement and bond waiver
- Corporate trustee authorization
- Resignation procedure and replacement mechanism

### 4. Beneficiary Designations and Distributions

**Lifetime:** Unrestricted income and principal to grantor.

**Post-death:** For each beneficiary, specify name, relationship, share percentage, distribution type (outright/in trust), and conditions (age triggers, etc.).

Include: per stirpes vs. per capita designation, specific bequests, minor provisions with age-based schedule (e.g., 1/3 at 25, 1/3 at 30, balance at 35), spendthrift clause, contingent/residuary beneficiaries, ultimate disposition if all predecease.

### 5. Revocation and Amendment

- Grantor retains absolute authority while living and competent
- Written, signed amendments; specify notarization/witness requirements per state
- Partial amendments or full restatement permitted
- Revocation returns all property to grantor
- **Joint trust:** specify consent requirements and first-death consequences (irrevocable vs. amendable by survivor)
- Trust becomes irrevocable at death or incapacity

### 6. Trustee Powers

Grant comprehensive authority across: investment (any asset class, retain originals, vote shares), management (sell, exchange, lease, mortgage), distribution (HEMS standard or broader discretionary — specify which), administrative (hire professionals, delegate, insurance, taxes, records), and special assets (business operations, rental property, IP).

Also address: prudent investor standard of care, compensation arrangements, liability/indemnification, removal provisions.

### 7. General Provisions

- Governing law (grantor's state of residence)
- Severability, no-contest/in terrorem clause
- Spendthrift provisions, tax allocation directives
- Defined terms: "issue," "descendants," "incapacity," "per stirpes"
- Accounting duty and waiver provisions
- Anti-merger provision (sole trustee + sole beneficiary)
- Trust situs, survivorship requirement (e.g., 30 days)

### 8. Execution

- Signature blocks for grantor(s) and trustee(s)
- Notarization (required in most states — verify state rules)
- Witness signatures if state requires
- Asset schedule exhibit attached (even if initially blank)
- Verify consistent trust name and cross-references throughout

## Pitfalls

- **State law controls** — execution requirements, community property rules, trust code provisions, and permissible powers vary by state. Always confirm. Mark uncertain statutory citations with `[VERIFY]`.
- **Unfunded trusts are ineffective** — emphasize funding schedule; provide retitling instructions.
- **Coordinate with pour-over will** — companion pour-over will captures assets not transferred during lifetime.
- **Qualified plan limitations** — retirement accounts cannot be retitled into a trust; trust can be named as beneficiary, but flag tax implications.
- **HEMS vs. broad discretion** — use HEMS for ascertainable standard (avoids estate inclusion for non-grantor trustees); broader discretion only where grantor is trustee or inclusion is acceptable.
- **Joint trust considerations** — delineate community vs. separate property in community property states; address A/B or disclaimer trust if tax planning is relevant.
- **No tax advice** — flag estate tax, GST tax, and income tax issues for CPA/tax counsel review.