A trust is a powerful and versatile estate planning document. It can pass control over property, allow you to dictate terms for payment, avoid a costly probate process, and maintain privacy. Here’s five steps to making your living trust.
- Pick the goals you want the trust to accomplish.
Everyone has different needs and desires when it comes to estate planning. There are many goals that estate planning can accomplish. It is important to know what those are before you begin so you know what the trust needs to accomplish. For instance, you may want to simply avoid probate while maintaining family harmony. But others may want to qualify for government benefits or avoid taxes. It’s up to you to decide what is most important.
- Determine what assets you want the trust to protect.
A trust can only protect property that it has been expressly given. That’s why it is important to know what property the trust will be designed to protect. For example, a primary residence is commonly protected by a trust. Other assets may be investment accounts or insurance proceeds that the trust will control after death. It’s up to you to decide which ones you want to protect and which you might want to keep in your personal possession.
- Decide who will act as your successor trustee.
While you are living and competent, you will be able to act as your own trustee. This allows you to control the property as though you still personally owned it. A successor trustee is that person you appoint to control the trust if you ever become incapacitated or die. They will be in charge of controlling the trust and carrying out any instructions you have left regarding the trust and payments to beneficiaries. If the beneficiaries are unable to control the property themselves, such as if they are minors, the trustee will continue to manage the property for their benefit.
- Choose your beneficiaries.
It is your decision as to who gets to benefit from the trust. It can be your natural heirs, such as your children. Or it could be an individual or cause that you feel a close connection to. It is up to you to decide, not the courts or probate laws. You can even decide how much and how long your beneficiaries will be able to benefit from your trust. This allows you to provide a program for your heirs that’s as simple or complex as you decide.
- Consult an experienced estate planning attorney to flesh out and draft your trust.
There are a lot of working parts that can go into a trust. Do-it-yourself kits or cheap options are about making you fit their pre-made trust, not about making a trust to fit you and your needs. There are a lot of ways that a trust can fail or be challenged, such as improperly written, fails to reflect your wishes, is not properly executed, or not properly funded. These are just a few common ways that trusts fail. An experienced attorney will be able to craft a trust that’s designed to hold up in probate court and carry out your wishes. Your attorney will also be able to discuss how your trust will fit with your other estate planning documents and desires.
Following these five steps will get you well on your way to making a living trust that reflects you and your desires. Just thinking seriously of these five steps puts you ahead of many other people seeking the protection of a living trust.