A living trust is an important estate planning tool that allows you to transfer your assets into the trust in order to avoid probate. When you have your assets connected to a trust rather than a person, the assets do not go into limbo once the person passes away.
As the grantor of your living trust, you can set what happens to your assets upon your death. Then, you can choose a trustee who has the responsibility of carrying out those rules once you pass away. For example, assets are sometimes distributed at the time of death. Other times, the instructions state that a beneficiary has to reach a specific age before receiving the funds.
The Responsibilities of a Trustee
A trustee is responsible for adhering to the grantor’s wishes regarding the trust. They keep financial records, communicate with beneficiaries when questions arise, and make hard decisions if the instructions are discretionary. The trustee is responsible if money were to go missing or taxes were evaded throughout the process.
Is Creating a Living Trust for Everyone?
With a living trust, you can use it to manage your assets before you pass away. Upon your death, nothing changes, leaving your family to skip all the drama that comes with going through the probate court process.
If there was only a simple will, it also becomes public record. Therefore, a living trust may be a better fit if you want to keep your affairs private.
Setting Up a Living Trust
If you are interested in creating a living trust, consider these best practices for setting it up correctly. For example, when choosing your trustee, you need to think about who you trust and who you know is responsible. That way you will know they will handle your estate properly. You also have the option to pick a corporate trustee if you need someone emotionally removed from the beneficiaries. This careful decision is essential to creating a trust that will benefit all parties involved.
Do you want to learn more about how a living trust may be the best option for you? Shoup Legal is your experienced Estate Planning Law Firm in Temecula and the surrounding areas. Contact us at (951) 445-4114 or send an email to [email protected] to start the process of setting up a trust.