A grantor trust is a revocable trust established and in effect during a person’s lifetime. Its main purpose is to transfer legal title of the grantor’s property to someone who holds the property for the benefit of another party. The trust is amendable or revocable by the individual during his lifetime so long as he has sufficient mental capacity.

With a grantor trust, the grantor pays the taxes. Some people set up living trusts to avoid paying taxes, instead leaving tax payment to the trust. However, with a grantor trust, there are some tax benefits for the grantor. The grantor pays the income tax, but trust assets aren’t included in the grantor’s estate for tax purposes. Prepare a grantor trust yourself or through a grantor trust provider to:

1. Avoid the need for probate court through a grantor trust at the time of death or incapacity.

2. Maintain homes, bank accounts and any other assets for the surviving spouse or dependent through a grantor trust.

3. Minimize estate administration costs such as inventory, accounting, appraisal and legal fees.

Action Steps
The best contacts and resources to help you get it done

Find professional advice from grantor trust specialists to avoid probate court

Probate court takes time and money and a grantor trust allows the surviving spouse or co trustee to avoid probate entirely. Grantor living trusts are the cornerstone for people with non-taxable estates, so they save families both time and money during difficult times. Finding the right attorney that specializes in grantor trusts makes avoiding probate easy.

I recommend: Visit the American Bar Association Lawyer Locator section. To find an attorney near you, select the state you live in, and in the “Areas of Practice” section, click on “Trusts and Estates.” The American Academy of Estate Planning Attorneys has a similar function on their website and all members of the Academy specialize in a variety of trusts.

Create grantor trust documents with online tools and resources

Grantor living trusts are relatively easy to produce with the right online tools and forms. Do it yourself trusts are also a great resource when time is an issue and a trip to the attorneys office isn't possible.

I recommend: U.S. Legal Forms offers downloadable software to help you create a grantor trust. LawfirmSoftware.com offers estate planning software to help you put together a single grantor trust, a joint grantor trust or a joint grantor trust with q-tip provisions.

Work with a grantor trust expert for savings on grantor trust management costs

During life's most difficult moments, it's nice to know money isn't a big issue. A grantor living trust cuts down on administrative costs by putting the surviving trustees in charge of handling the estate. Use trusted experts in grantor trust work for the most comprehensive plans available.

I recommend: Serving Central California, Dowling, Aaron & Keeler specializes in estate planning, probate and trust administration. Alston & Bird LLP have offices in New York, Washington DC, North Carolina and Georgia.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Get grantor trust advice through a qualified estate planning or trust attorney. Check with your local senior center or your state bar association for attorneys who specialize in this area of law.
• •  Ask your estate planning attorney for a grantor trust list. This list helps walk you through the steps of preparing and finalizing your trust.
• •  Make sure your grantor trust contains all appropriate assets. This includes life insurance, certain deeds, banks accounts and investment accounts.