When dealing with finances, a person cannot afford to wait to prepare for the future. With that said, consider building a comprehensive estate plan with a living trust.
What’s a living trust?
A living trust or an “inter vivos trust” is a legal document that describes the manner your assets are handled, before and after your death. Its purpose is to provide for your beneficiaries, such as your spouse or your children.
In a living trust, the person establishing it is called the settlor or grantor, while the individual managing the assets in the trust is called the trustee.
How does it work?
While living, you can be the trustee as well as the settlor. You can name a successor who will succeed you after your death. You can also appoint another trustee, however, if you’re ill at ease with managing the living trust yourself.
How does it start?
To establish a living trust, you need to create the deed of trust or trust agreement, which you can accomplish by yourself, or with your asset protection attorney.
After creating the trust agreement, you need to fund it, which means transferring the assets you want to include in the trust. For instance, you can transfer your real estate, bank accounts, and stocks and bonds to the trust to fund it.
When you want to transfer real estate, you need to retitle it and establish a new deed under your trustee’s name. When you want to transfer bank accounts, or stocks and bonds, on the other hand, you need to transfer the account to your trustee’s name, or open a new account under your trustee’s name, depending on your financial institution’s policies.
When building a comprehensive estate plan, establishing a living trust is an ideal option. With it, you can manage your assets any way you want, before and after your death.