29th Mar 2017
One of things you should think about when it comes to estate planning is the need for a living trust. However, you need to understand the key differences between a standard will and a living trust.
A living trust is a legal and binding agreement in which you transfer your property into a legal document. You are in charge of the assets until the time of your passing and then the assets in question are then passed to the appointed trustee without being subject to probate. A will and testament is a legal and binding document in which you detail the distribution of your assets only after your death. Unlike a living trust, a will requires a probate process to ensure that this process goes smoothly.
A living trust is beneficial in that it is valid as soon as it is officially executed, whereas a will is not effective until the event of your death. Also, a living trust is more efficient than a power of attorney in the event at you become incapacitated. A living trust will ensure you that your family will be taken care of and can make decisions on your behalf, should you become unable to care for yourself as opposed to only after your death. As such, a living trust will also ensure a fast dispersion of your assets without the complications of a probate process. The following are some factors you should take into consideration should you chose to prepare a living trust.
- Decide if you will be the sole grantor of the living trust
If you are legally married or in a domestic partnership and own joint property, you should consider a joint trust, as only property that you own may be entered into your living trust.
- Accumulate all the necessary forms and documentation.
It is important to gather all the required documents such as property deeds, tiles, life insurance and retirement policies, stocks, bonds and so forth. You need to have these documents easily accessible for your attorney in order to “fund” your trust.
- Make a list of your assets
Assets include both tangible items such as your home, possessions and vehicles and intangible items including stocks, bonds and any policies. If you make a detailed list of your assets, it will enable you to have a better idea as to what items will need to be distributed amongst your loved ones after your demise.
- Designate your beneficiaries
Beneficiaries can include immediate and extended family, spouses or domestic partners, co-workers, friends and the like. You can also choose a charity or favorite organization as the beneficiary of your living trust. Remember that to designate someone as a beneficiary on your living trust is a separate process from listing them as the beneficiary of your will, retirement or insurance policies.
- Choose a successor trustee
A successor trustee is the person you designate to distribute your assets. They obtain the responsibility of paying off any remaining debts at the time of your passing, or if you should become incapacitated. This must be someone whom you trust beyond a doubt, and whom is extremely responsible when it comes to handling such matters. Of course, it is wise to include them in the process of writing your living trust to ensure that they are, in fact, willing to accept the full responsibility.
- Choose someone to manage assets for your offspring
Unlike a will, you cannot name a guardian for your minor children in a living trust. However, you do need to make sure that they are properly cared for in the event of your demise. You can name someone whom you trust to care for your offspring and manage their assets until they legally come of age.
After you have ensured that the above steps are completed, you would need enlist the help of an estate attorney to help you draw up the living trust agreement. You would then have it signed and notarized according to the requirements of your state. Next you would “fund” your living trust and transfer all of your designated property and assets. Finally, you need to store your living trust in a safe place such as a safe deposit box or with someone whom you trust. Last, you need to ensure that you keep all information and documentation in your living trust relevant and up to date.
When you are ready to prepare your will or living trust, please call Tomkins Law at 1-714-385-0044. Our team of experienced estate planning attorneys will assist you with any questions you may have regarding your living trust.
You can trust us to keep your information confidential as these matters should not be entered into lightly or without professional legal advice. We will provide you with a free consultation and help put your mind at ease as you embark on planning for your future and the well-being of your family members.