When you think about planning for your future, you may wonder if you need to create a trust to protect your assets and to ensure your beneficiaries receive money or property that you wish to pass on. The creation of a trust offers you a variety of options for estate planning, and there are a few steps you can take as you and your lawyer work together on its planning.
- Understand Its Purpose
A trust allows for you to place assets in the hands of a third party, or trustee, who becomes responsible for overseeing its care before the contents are passed to its beneficiaries. You can name as many as you need to, such as your children and grandchildren, siblings, or your spouse.
A trust may also help your beneficiaries avoid probate court, as a trust’s validity does not need to be proven in court because you do not own the assets; they belong to the trust and remain controlled by the trustee. A trust may also help your beneficiaries avoid certain taxes and guard the assets until they are mature enough to take control.
- Choose a Trust Type
If you are married and you and your spouse own most of your property and assets jointly, you may need to create a shared trust. For example, if you have a classic car you want to add to the trust but you share the title with your spouse, then a shared trust may be necessary to avoid any confusion. Your attorney can help you decide what kind of trust you need.
- Make a List of Beneficiaries
You can include both individuals and organizations in your trust, making different provisions for each. Consider naming charities in your trust, as it is very difficult for anyone to challenge a trust in court, especially when compared to the contents of a will. You may also name alternate beneficiaries if a listed individual should pass on.
- Choose a Successor Trustee
Speak with your trustee about who might act as a successor trustee, who is responsible for the distribution of your assets after you pass away. Consider asking a close friend or the most responsible of your adult children to take on this role and then have him or her discuss details with your attorney.
Creating a trust to provide for the future of your loved ones can be a puzzling process, but help is available. Contact a lawyer, like an estate planning lawyer from Klenk Law, today for further information or to schedule an initial consultation.