A Living Trust Attorney can provide guidance on estate planning matters.
Living trusts, which become effective upon your death, can help your heirs avoid the probate process and save on costs. But you should carefully consider whether a living trust is the right option for you. The truth is, the value of a living trust depends on the specifics of your assets and family dynamics. A good estate planning lawyer will review your assets and discuss options, including a living trust, that best suit you.
When you set up a revocable living trust, you name yourself as trustee while you are alive. You also select a successor trustee who takes over when you die or become incapacitated. You should choose a trustee who will be able to manage the trust assets, including investments, in accordance with your wishes and instructions. In addition, you should make a list of the property that is to be included in your living trust and designate who is to receive those items. This can prevent disputes after your death, such as over what to do with grandmother’s pearls or a valuable collectible vehicle.
Depending on the type of trust, you may be able to transfer certain assets without incurring any tax consequences. However, some transfers will require a legal change of title to the trust, such as real estate, vehicles and bank accounts (excluding 401ks and other tax-deferred retirement accounts). The trustee may also have to complete beneficiary designations for life insurance policies, annuities and qualified plans (IRA, 401k, TIAA-CREF, etc). All these steps add up to extra time, expense and potential mistakes that can be costly in the long run.
A trustee must keep accurate records of the property. Having this information can be helpful when you prepare your taxes. Your trustee should also know how much you have in the trust at any given time, and he or she can disclose that amount to beneficiaries when requested.
The trustee must take good care of the property. The trustee must have the financial knowledge and experience to make prudent investments and protect the trust assets. In addition, the trustee must have a high degree of honesty and integrity. This is an important point because the trustee has a duty to act in the best interests of the trust beneficiaries.
You can craft a living trust on your own, but it’s always wise to have a skilled estate planning lawyer check the document for accuracy and compliance with state laws. A lawyer can also provide assistance when it comes to transferring assets into the trust and avoiding probate.
It’s also a good idea to review your trust periodically, especially after major changes in your life. Maksimovich says that for many of his clients, an annual review is enough, but for others, every three to five years may be more appropriate.
A revocable living trust can be a useful tool for avoiding the probate process, but you must plan carefully to ensure that it does what you intend. For example, if you are trying to get a new mortgage or home equity line of credit while the property is in the trust, the lender will usually require that the property be transferred back into your name in order for the loan to go through.