Even though a living trust is a part of almost every modern estate plan, there’s a big difference between creating these devices and managing them properly. A lot of people hear about living trusts, and the benefits they convey, and immediately decide that these tools are right for them.
However, even though your living trust is a legal instrument, it might be better to think of it as a living thing, such as a houseplant or pet. Like any other living thing, you have to care for your living trust regularly in order to keep it healthy. Your estate planning lawyer will guide you through this process, but in the meantime, here are three tips you need to consider if you’re thinking about creating a living trust.
Tip 1: Keep adequate records.
Your living trust will own most, if not all, of your personal property. Whenever you buy something, sell something, or make any kind of transaction involving trust property, you have to take the time to keep careful records of these transactions. These records don’t have to be anything elaborate, but you can’t simply treat trust property in the same way you would treat your personal property. Good record-keeping is essential to keeping your trust healthy.
Tip 2. Make sure the trustee is responsible.
The trustee of your living trust will have the responsibility to manage all of the trust property. In most situations you will serve as your own trustee. As does any person who has managerial responsibility, you will have to regularly review the trust and make sure that you are doing everything you can to properly manage the property. If you are unable to handle this type of responsibility, you might want to choose someone else to act as trustee. Though it’s more rare than serving as your own trustee, hiring and institutional trustee or professional to serve in the managerial role is an option.
Tip 3. Plan ahead for possible emergencies.
Accidents, injuries, and unexpected circumstances happen. If you have a living trust, your trust needs to be ready in case something should happen to you. If you are serving at your own trustee, you will need to make sure your trust has a replacement trustee ready to take over. Your replacement will need to be able to manage the property in the event you no longer can.
Tip 4. Seek out reliable advice.
Your living trust is a legal tool, and you need to seek qualified advice whenever you have any questions about it. Talking to an experienced estate planning attorney whenever you have question or concerns is the best way to make sure you keep your trust as healthy as possible.
You can learn more about living trusts at one of our upcoming free seminars in the Greensboro, North Carolina area. Visit our seminars page for details and registration information.