One of the most important decisions to make when setting up a living trust is to work out what property you want in the trust. It’s common to place virtually all of your assets (other than retirement plan assets) in the trust to avoid these going through probate, but you’ll need to know what type of trust you want before choosing which assets to transfer.
Will the trust be in just your name? Or, will you share the trust with your wife or husband?
Another key aspect of a trust is your chosen beneficiaries. You need to choose who will inherit what. It could be your children, a friend, or even a charity.
You also need to nominate a person who’ll administer your property upon your death. It needs to be someone that you can trust and that agrees to carry out your wishes. There’ll be times when the beneficiaries are either minors or are irresponsible and unable to manage the assets they inherit. In such cases, you’ll select a person to manage it for them and name them in the trust.
Once you’ve set up the trust, you’ll need to begin “funding” it by transferring titles to your property. There are rules you must follow in relation to signing the documents, otherwise the transfer may not be legally binding.
Setting up a living trust is a legal process. If not done correctly, it may be invalid. For this reason, it’s best to consult a good estate planning attorney to help with the process of setting up a living trust.
Roger Levine, Estate Planning Attorney
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