Most people set up living trusts as part of their estate plans for two reasons:
- A living trust helps to protect your assets should you become incapacitated in the future
- A living trust lets you avoid probate for any assets you put into the trust
When setting up your living trust, there are three important questions you will need to ask yourself:
1. What assets do you want to put in your living trust?
A living trust that sits empty of assets won’t do you any good. It’s important that you fund your trust with assets. You do this by transferring ownership of the assets from you to the trust. This transfer of ownership needs to be done correctly, based on the type of asset you’re transferring in. For example, if you want your trust to hold real estate, you’ll need to transfer the property to your trust using a deed, such as a quitclaim deed.
Once you know what assets you want to place in the trust, it’s always a good idea to consult with an experienced trust lawyer, like the Springfield trust lawyers at Parks & Jones, to make sure the assets are properly transferred into the trust.
2. What if I forget to transfer an asset to my living trust?
The flexibility that a living trust offers comes from the revocability of the trust. This revocability means you can end the trust at any time. It also means you can continue adding assets to the trust, as well as taking assets out of it, for the lifetime of the trust.
So if you forget to transfer an asset to your living trust when you’re first setting it up, you can always do it at a later date. And of course, if you decide you don’t want the trust to hold a particular asset, you can take it out.
But when setting up a living trust, you should also consider having a pour-over will in place. With a pour-over will, any assets that you hold at your death are automatically transferred over to your trust. This will prevent a situation where an asset will need to go through probate because you hadn’t transferred it to the trust before your death.
3. Who do I want to act as my successor trustee?
Choosing who you want to act as your successor trustee is another important question you will need to answer. While you’ll be the trustee of your trust, you also need to name a successor trustee, as this is the person who will step in to manage the trust at your death, or if you become incapacitated and can no longer manage the trust yourself.
When choosing a successor trustee, you want to pick someone you can trust to manage your trust and distribute the assets to the beneficiaries in accordance with your wishes. So you want to choose wisely because you want someone who’s responsible and trustworthy.
Talk to a Springfield Trust Lawyer About Setting Up Your Living Trust
A living trust can be an ideal estate planning tool, but it’s important for trusts to be set up properly. An experienced Springfield trust lawyer at Parks & Jones can help you to create your living trust, as well as other documents in your estate plan. Contact us today to schedule a consultation.