In a Revocable Living Trust, WHAT it specifies?

[Mark2365]

In Arizona, the existing Trust says:

2.1 SECTION:- THE TRUSTEE GATHERS ASSETS
On the death of the Creator, the Trustee shall collect all insurance proceeds payable to the Trustee by reason of such death, all bequests and devises distributable to the Trust Estate under the terms of the last Will of the Deceased Creator, and any and all other assets passing to the Trust as the result of the death of the Creator.

I understand that as: the Trustee will “collect” … “all other assets” of the Creator.
1. What happens to Real Estate that the Creator owns?
Yes, that real estate has already been transferred to the Trust.
But, will the Trustee SELL that RE, and then distribute the sale proceeds?
2. Why does it mention that Assets “pass to the Trust” after the Creator’s death?
That is: Aren’t those assets already Owned by the Trust?

And, an unrelated question:
Is the complete text (details) of a Revocable Living Trust publicly available?
Is it Recorded at the county? All pages?

Thanks very much, people.
Mark2365

 

[adjusterjack]

I'm not a lawyer but I know a little about trusts because I have one, in Arizona.

Any comments that I make should be verified by a trust attorney.

1. What happens to Real Estate that the Creator owns?
Yes, that real estate has already been transferred to the Trust.
But, will the Trustee SELL that RE, and then distribute the sale proceeds?

Real estate that is owned by the trust should have a recorded deed showing that the trust is the owner. The disposition of the real estate is subject to the terms and conditions of the trust. In other words, the trust instructs the trustee on what to do with the real estate. You'll have to read the trust documents to find out what you are supposed to do. There could be one or more options.

2. Why does it mention that Assets “pass to the Trust” after the Creator’s death?
That is: Aren’t those assets already Owned by the Trust?

No. There could be assets that were owned personally by the deceased. Items that come to mind are the contents of his home, a vehicle that was titled to him as an individual, and possibly accounts in his own name for which beneficiaries were inadvertently omitted and would have to be paid to the name of the estate.

Items like those are generally specified in a "pour over will," a will that specifies that anything not in the trust or not specified with listed beneficiaries "pours over" into the trust and is handled via the trust's instructions.

Is the complete text (details) of a Revocable Living Trust publicly available?
Is it Recorded at the county? All pages?

No, and no. Trust documents are private contracts between the maker, the trustee, and the beneficiaries and are recognized by statute.

Scroll down to Chapter 11 - Arizona Trust Code. You would be wise to familiarize yourself with it.

https://law.justia.com/codes/arizona/title-14/

 

[huddy61]

The trustee only sells the real estate if the trust document specifically says to or if it's necessary to pay off debts. Otherwise, they usually just transfer the deed to the beneficiaries. Also, trusts aren't public record like wills are, which is why people use them.

 

[zddoodah]

1. What happens to Real Estate that the Creator owns?

We have no way of knowing.

Is the "Creator" (settlor) still alive? If so, does he/she own real property? If so, is it titled in his/her name as an individual, or is it titled to the trust? Sounds like the latter is correct. Who is the current trustee? Is the trust revocable or irrevocable? What, if anything, does the trust say about disposition of real property? The section you quoted has nothing to do with disposition of assets. What is your relationship to the trust or to the settlor?

that real estate has already been transferred to the Trust.
But, will the Trustee SELL that RE, and then distribute the sale proceeds?

Again, we have no way of knowing without knowing what the trust say about asset disposition.

Why does it mention that Assets “pass to the Trust” after the Creator’s death?

It doesn't. As you quoted it, the trust charges the trustee with "collect[ing] . . . any and all other assets passing to the Trust as the result of the death of the Creator. Whether there are or, at the time of the settlor's death, will be assets that fit the description is obviously something no one here knows.

That is: Aren’t those assets already Owned by the Trust?

Do you think folks here have information about this trust beyond what you have told us?

Is the complete text (details) of a Revocable Living Trust publicly available?
Is it Recorded at the county? All pages?

Generally not, but sometimes yes.

Also, trusts aren't public record like wills are, which is why people use them.

While that is a reason why some people create trusts, the reason why most people create trusts is to allow for the distribution of their estates without probate, and the reason for avoiding probate is to avoid the time and expense of it. The average Joe isn't at all concerned about postmortem privacy.

 

[not2cleverRed]

1. What happens to Real Estate that the Creator owns?
Yes, that real estate has already been transferred to the Trust.
But, will the Trustee SELL that RE, and then distribute the sale proceeds?

The real estate has already been transferred to the trust, then it is a devise of the Trust.
If there are specific directions in the will on how things are to be distributed, it's a good idea to follow that, to the extent that is possible.
It there are only general directions in the will, then it depends.

2. Why does it mention that Assets “pass to the Trust” after the Creator’s death?
That is: Aren’t those assets already Owned by the Trust?

It mentions that to make sure that all assets of the trust's creator can be controlled by the Trustee. The Trustee only has power granted to deal with what's owned by the Trust.

 

[Taxing Matters]

No, and no. Trust documents are private contracts between the maker, the trustee, and the beneficiaries and are recognized by statute.

Not correct. Trusts are not contracts which is why there is a separate body of law that governs trusts. Think about it a moment and you'll see why. One of the elements of a contract is mutual consideration. In trust the beneficiaries provide no consideration to the trust creator in exchange for the property they'll receive from the test. The assets they receive are gifts. For that reason, with a revocable living trust the trust creator may terminate the trust at any time or revise the trust to change what a beneficary will receive without any consent from the affected beneficiaries. A beneficiary may not sue the trust creator for removing him or her as a beneficiary in a breach of contract action unless, in addition to the trust document, there is a separate contract document that guarantees the beneficiary what he or she will get from the trust.