A revocable living trust is often a centerpiece of estate plans created by people in the Greensboro, North Carolina area. The idea of a revocable living trust is relatively simple. It’s essentially a separate legal entity you can create that has the ability to own property. When you use the trust to transfer inheritances after you die, you allow your trust to avoid, or at the very least minimize, the probate process.
If you’re worried about creating a living trust, aren’t sure how to use them, or wonder what you need to do after you’ve completed making yours, here are a couple of tips you can use.
Living Trust Tip 1. Trustees and Beneficiaries
As the person who establishes a revocable living trust, it’s up to you to make the important choices. You will, for example, have to choose the trustee, the beneficiary(s), and determine the rules under which the trust operates.
In most living trust situations you’ll serve as the trustee for as long as you are able. After all, most living trusts are created to allow your estate to avoid probate after you’re gone, not to take away your ability to enjoy the things you own. By being both the beneficiary and the trustee, you can retain control over your property for as long as you retain your abilities.
Living Trust Tip 2. Fund, Fund, Fund
So let’s say you’ve created your living trust. You talked to your lawyer, made sure you took the steps the lawyer told you to take, and created a document with all the necessary information. Now you’re done, right?
Wrong. Creating a properly drafted trust instrument is essential, but you cannot simply stop there. The next step you need to take is to ensure that you begin transferring your individually owned property into the trust’s name. This is called funding. The funding process ensures that the trust will become the new legal owner of your property. Failing to perform this process will mean that you fail to take advantage of the probate-avoidance benefits for which your established the trust in the first place. Funding requires different steps depending on the particular type of property involved, but it’s essential if you want to get the most out of your revocable living trust.
Living Trust Tip 3. Plan For Your Incapacity
You might know that incapacity planning is a key part of every estate plan, but you might not realize that your revocable living trust can also be a part of that incapacity plan. When you create your trust you must choose a successor trustee who can take over managing the trust if you ever become sick or otherwise incapacitated.