A living trust is one of the many ways people try to avoid probate, which is a court process of having your property distributed to creditors and heirs after your passing. This can take far too long and can cause major problems with your family. A living trust can help expedite the entire process since you have outlined exactly how things should be done. Here are five things that you must make clear in your living trust:
1. The Trustee
In a living trust, you must designate a person to be responsible for carrying out the instructions of the trust. This person will also be responsible for taking care of the living trust as a whole. In some instances, you may be able to name yourself as the primary trustee of the living trust.
2. The Successor Trustee
This person is particularly important if you designated yourself as the trustee of your living trust. However, it is also an important step of creating your trust if you have someone else as the trustee. Basically, the successor trustee is the person who will take over your trust in the event that the originally named trustee dies or becomes incapacitated to the extent that he or she cannot manage your trust any longer.
It is recommended that you name at least one successor trustee, but you may want to consider naming two or three. This way if one decides they no longer want the responsibility that the role carries, you will already have a backup in place.
3. The Beneficiary
In a living trust, you outline what you have, how you want it dispersed and who you want to receive it. The individuals that you want to receive your assets are known as beneficiaries. You can have one or you can have 20. The choice is yours.
4. The Property and Assets
While the people that manage your trust and the individuals who will benefit from your trust are important, you need to also list all of your assets and property that will be distributed once you die. It is important that you provide a clear picture of your property in order to avoid confusion down the road. For example, if you have two vacation homes, make sure to list the full and exact addresses of the properties rather than something vague like "my first and second vacation homes".
5. The Instructions for Management and Distribution
Your living trust must also be designed with full, clear instructions for the trustee. These instructions will provide them with information as to how you want your property and assets to be taken care of when you die. For example, you may have a piece of property that you would like rented out. You would also like the monthly rent from this home to be given to one of your kids or put in a trust fund for a grandchild.
If you have a large sum of money in a bank account, you may want the trustee to invest this money. If you have multiple pieces of property or a significantly large piece of land, you will want to outline how this property should be divided. You should also make it clear who will get what and the exact time that they can inherit it. For example, some people tend to require a child or grandchild to reach a certain age, graduate college or get married before they inherit money.
If you would like to learn more or need legal help to write your living trust, contact an attorney, such as those at Law Offices Of Doonan & Doonan Inc, who can help you through every step of the process or simply point you in the right direction.Share