Things To Consider When Creating A Trust

Things To Consider When Creating A TrustThe best way to express your love for your family is to make sure that they are cared and provided for while you live and after your death. Granted, most Americans will shy off anything that paints a picture of death, such as a living trust, but death is inevitable, and it will come at some point. It is not a matter of ‘if’ it will come but ‘when’ it will come. So it makes sense to start planning for it now since life is unpredictable and tomorrow is not guaranteed for anyone.

Creating a living trust is one of the best ways to ensure that your family will still be adequately provided for even after you have passed. Note though that a living trust is not the same as a last will and testament. Even though both deal with the distribution of assets after your death, the former has an added advantage in that its provisions take effect while you are still alive.

In addition, a well-drafted will comes with further benefits in the form of asset protection and tax exemptions. But how do you draft a proper living trust? Here is a list of the top 3 things to consider when creating a living trust.

  1. Your estate
    The first factor you need to consider when writing a living trust is the size of your estate. In this context, your estate is comprised of everything that you own. This includes things like real estate, vehicles and intangible assets like insurance policies and stocks.Take a full inventory of all your property as extensively and as accurately as possible. While you are at it, make sure you also collect all the relevant papers such as deeds, stock certificates, and insurance policies.
  2. Your beneficiaries
    The purpose of setting up a living trust is so that you can distribute your property among the people closest to you. The people receiving the estate are referred to as your beneficiaries. Take time to identify all your beneficiaries and list them down. Make sure that no one close to you is left out of your list of beneficiaries unless that exclusion is intentional.You might also want to discuss with your attorney if you have some people close to you who you do not want to get any share of your estate. This is important because some states have laws that will not allow you to cut off some relations like underage children. If you do so, then your living trust could be contested after your death and possibly even revoked.
  3. Your successor trustee
    Once you set up your living trust, you become its trustee. You can still go on managing every aspect of it as you would without the trust although you can no longer treat it as your property. The living trust only comes into effect upon your death. Obviously, at that point, you will not be able to manage or oversee anything. You will need someone to do that for you, and that is why you need to choose a successor trustee. He or she will oversee the implementation of the conditions and provisions outlined in your living trust.

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