Establishing a Living Trust

Setting up a living trust can provide a number of benefits when it comes to estate planning. The process of establishing a living trust can be complicated, but you will be able to publish it as long as you understand the basic steps involved. Here are the basics of establishing a living trust.

What Is a Living Trust?

A living trust is a legal entity that you can set up to manage your assets while you are still alive. By setting up the trust, you will also be able to govern what happens to your assets after you pass away. There are many reasons that people use for setting up a living trust. For example, you might want to prevent a young child from getting a large inheritance right away. With the living trust, you can specify that they will not receive the money until they reach the age of 25. You might also transfer assets into a living trust instead of to a spouse so that your beneficiaries will be able to avoid a large estate tax.

Contact a Lawyer

When trying to establish a living trust, one of the first things that you should do is contact a lawyer. You need to find a lawyer that specializes in estate planning. There are many different types of lawyers out there and you want to focus on only the estate planners when selecting a lawyer. They will be able to provide you with the most insight and answer your questions accurately. Although you can potentially establish a living trust on your own, hiring an estate planning lawyer will help you avoid making any large mistakes. Some states also require that a lawyer is involved in the process of setting up a living trust in order for it to be valid. Therefore, it is best to avoid any potential problems and hire a lawyer from the beginning.

Completing Documents

Once you start to work with your lawyer, they will be able to draft the appropriate documents for your situation. During this process you will need to determine who your beneficiaries are going to be. You want to figure out exactly where all of your assets are going to go once you pass away. All of this needs to be clearly detailed in the documentation of the trust. You also need to decide when and how your beneficiaries are going to receive their portion of your estate. 

Transferring Assets

The next thing that you will need to do is transfer your assets into the trust. If you do not completely transfer your assets into the trust, the trust will basically be useless. In order for your beneficiaries to receive assets once you pass away, they have to be entered into the trust first. This means that you need to change ownership on deeds, titles, and any other documentation that is necessary.

Registration

In some states, you will now have to register the trust. This will involve a basic document that you file with the state that outlines the details of the trust.

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