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What are the purposes of Schedules A and B in a revocable living trust?

What are the purposes of Schedules A and B in a revocable living trust?

Full question:

I just purchases a revocable living trust. I do not understand the purpose of Schedules A and B. Please explain

Category: Trusts
Date: 04/07/2025
State: Illinois

Answer:

Schedules A and B serve specific functions in a revocable living trust. Schedule A is used to transfer assets into the trust, ensuring they are managed according to the trust document. This includes all property transferred to the trust, along with any income or investments generated from those assets.

On the other hand, Schedule B is for transferring non-business tangible assets to beneficiaries outside of the trust upon the trustor's death. This allows the trustor to make individual gifts to specific people separate from the trust itself.

In summary, Schedule A is for funding the trust with assets, while Schedule B is for distributing certain assets directly to beneficiaries after the trustor passes away.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

What is the biggest mistake parents make when setting up a trust fund?

One of the biggest mistakes parents make when setting up a trust fund is failing to properly fund the trust. This means not transferring assets into the trust, which can lead to confusion and complications later. Additionally, parents may overlook updating the trust as their financial situation or family dynamics change. It's essential to regularly review and adjust the trust to ensure it meets current needs and intentions.

What is the disadvantage of a family trust?

A disadvantage of a family trust is the potential cost and complexity involved in setting it up and maintaining it. Trusts often require legal assistance to draft and manage, which can incur fees. Furthermore, if not properly funded or managed, a family trust may not provide the intended benefits, leading to disputes or delays in asset distribution.

What is the schedule A for a revocable trust?

Schedule A for a revocable trust is a document that lists all the assets being transferred into the trust. This includes real estate, bank accounts, investments, and other property. By detailing these assets, Schedule A ensures they are managed according to the terms of the trust, providing clarity and organization for the trustor and beneficiaries.

Why are trusts considered bad?

Trusts can be considered bad by some due to their complexity and the costs associated with setting them up and maintaining them. If not properly funded or managed, they can lead to confusion and disputes among beneficiaries. Additionally, some people may feel that trusts limit their control over their assets while they are alive.

Should my parents put their assets in a trust?

Whether your parents should put their assets in a trust depends on their financial situation and estate planning goals. A trust can help manage assets, avoid probate, and provide for beneficiaries according to specific wishes. However, they should consider the costs and complexities involved and consult with a legal professional to determine the best approach for their needs.

What is the downside of putting assets in a trust?

The downside of putting assets in a trust includes the initial setup costs and ongoing management fees. Additionally, if the trust is not properly funded or if the terms are unclear, it can lead to complications and disputes among beneficiaries. Trusts may also limit access to assets during the trustor's lifetime if not structured correctly.