While probate is a common occurrence, most people would prefer to avoid that particular experience. Probate can be expensive, time-consuming and emotionally draining. And considering that probate occurs after you’ve lost a loved one, the last thing you want to do is spend time and money in court dissolving your family member’s estate.
Fortunately, a living trust can help you do just that.
With a living trust, all your assets are transferred into the name of the trust rather than being titled to you individually. This is important because when you pass on, any assets titled in your name are subject to probate. But assets in the name of the trust can be passed directly to your beneficiaries without court supervision.
How to Create A Living Trust
Because a trust is a separate legal entity, you’ll need a legal document known as a Declaration of Trust. Your estate planning attorney will help you prepare this important document. There are however, some things you’ll want to have figured out in advance:
- Your Trustee – Typically the person who created the trust (you) chooses to act as their own trustee, so that you have primary control over the assets you put into your trust. But you don’t have to be your own trustee and if you’re not sure, talk it over with your attorney to get a clear understanding of all your options.
- Funding the Trust – Once you’ve created your trust, you’ll then need to fund it so start thinking about what assets you want to use. Your house is a good one for example, but it might be easier to keep your car in your own name. Again, your attorney can give you guidance on which assets work best, but it certainly doesn’t hurt to start thinking about the assets in your estate now.
- Name Your Beneficiaries – Who will inherit after you’re gone? Make a list of the people or organizations that will inherit the assets and property owned by the trust after you die. Keep in mind that this will only cover the property and assets that are held by the trust; anything outside of the trust you would need to cover with a will.
- Name a Successor Trustee – This is the person that will become trustee after you die.
Having this kind of basic information mapped out is the first step to creating your own living trust. If you’d like more information about a living trust, contact our office today.
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