How to Setting Up a Living Trust: Steps to Follow

Setting up a living trust is one of the ways to protect one's assets and ensure that in the case of death, whatever is there is distributed according to one's wish, is the creation of a living trust. A living trust avoids probate and offers privacy, affording one with far greater control over just how-and, really, when-beneficiaries inherit the inheritance thereof. At One Pacific Trust, we guide you through this process so your living trust is seamlessly created and tailored to meet your unique family needs.

Living Trust Checklist

Preparing a living trust is one of the most valuable tools of estate planning to navigate what you have during your lifetime and also transfer it efficiently the way you wish at the time of death. The steps for setting up a living trust are outlined in this checklist.

1. Define the Trust's purpose: Establish why you would like to have a living trust created. Common reasons for setting up a living trust include avoiding probate, handling of assets in case of incompetence or incapacity, and privacy regarding asset distribution.
2. Choose the Kind of Living Trust: There are two types of living trusts, which are the revocable living trust whereby you can change whatever you want and you remain in control during your life, and the second one is the irrevocable living trust, whereby changes are not generally allowed once established but which provides greater protection from creditors.
3. Select a Trustee: Select someone that you trust to manage the assets that will be in the trust. This might be you, in the case of a revocable trust, or it may be a third-party trustee if you prefer someone else to assume the responsibility.
4. Designated Successor Trustees: Appoint a successor trustee who can take control of the trust in the event of your disability or death. Recently, it has been a trend that whoever is appointed as a backup if the first is not available to serve.
5. List Your Assets: Real estate, bank accounts, investment portfolios, valuable personal property.
6. Prepare a Trust Document: A Trust Document should outline the terms of the trust, identify the beneficiaries, detail the responsibility of the trustee, and describe the conditions under which the assets will be distributed.
7. Sign and Notarize Trust Document: Sign and have the document notarized. This step is the first in actually establishing the trust.
8. Transfer Assets: Put the name of the trust as the title of the assets. May be as simple as changing the deeds, accounts, and other documents related to the assets.
9. Notice to Beneficiaries: It's also a good idea to always let the beneficiaries know regarding the trust and how it operates and what they may expect.
10. Keep Records and Accountability: Keep detailed records of trust properties and regular review and updates when trust conditions change or your personal preferences change.

Living Trust Checklist

Living Trust Do it Yourself

Setting up a living trust will save you money on attorney fees and put you in charge of the process. However, like a will on one's own, it takes a hefty amount of focus on detail to make sure you do everything legally and properly. The following is how you can draw a living trust yourself:

1. Research State Laws: Establish what the laws that control living trusts in your state are, the same varies from state to state. Before you embark on the process of setting up a living trust, you see either the states' laws.
2. Look for a Sample Trust: There are good resources on the Internet from which sample living trust documents can be obtained. Such should be customized for your needs as well as for state laws.
3. Fill in the Trust Document: Write all necessary details such as your name, the trustee's name, the name of a successor trustee, a list of assets, and finally, beneficiaries' names.
4. Transfer Ownership of Assets: Re-title your assets to indicate they own the trust. This is one of the vital steps to be undertaken so that the trust actually comes into operation and receives and handles the assets in the right way.
5. Sign the Trust Document: Be sure that you have the document notarized in front of a notary public. The legal creation of the trust is not complete without this step.
6. Safe Storage of the Documents: Store the original trust document in a safe place, for example, a safe deposit box, or keep it with other important legal papers. Please let the successor trustee know the whereabouts of these documents.
7. Review and Amend as Necessary: Periodically review your trust to make sure it continues to satisfy your current desires and update as needed to accommodate changes in your life such as the birth of a child or change in your assets.

Living Trust Do it Yourself

Setting Up a Living Trust

Setting up a living trust is a planned exercise that covers your basic intentions so that your assets are managed and distributed according to your desires. Below are the steps involved in the process:

1. Decide on the Trust’s Purpose and Type: Whether you have an irrevocable or revocable living trust, fitting your needs is crucial. Some of the factors that will guide the decision are asset protection, tax issues, and asset control.
2. Draft the Trust Agreement: This is the legal document that states the terms of the trust, the trustee, the beneficiaries, and the trust distribution instructions. Coordinate with a trust attorney to help you ensure your document is sound, even when you're starting the draft on your own.
3. Name Your Trustee: Your trustee is the person or institution to whom you entrust the management of your property. You can also be the initial trustee if you are establishing a revocable trust and manage your assets during your lifetime.
4. Contribute Assets to the Trust Transfer assets: it could be real estate or financial accounts, whatever you want to legal ownership is transferred to the trust to be handled according to the terms and conditions you have placed in the trust document itself.
5. Executing the Proper Legal Signatures: Sign the trust agreement in front of a notary public to complete the document. You may also need a few witnesses to complete this task, as is required in many states.
6. Inform Beneficiaries and Trustees: Create awareness to the beneficiaries and successor trustees about their roles respectively and the general purpose of the trust.
7. Record-keeping and Periodic Review: Make provisions for periodical updating of your trust documents with changes in your personal situation besides your finances or the legal environment. Detailed record keeping ensures clarity and that one is compliant.

Setting Up a Living Trust

Conclusion

A living trust is the final, most important step in this entire arena of estate planning. It will allow you control, flexibility, and peace of mind with your assets. Understanding the basics of how one would go about setting up a living trust you can do it yourself or with professional help can hopefully give you confidence that your property will be disposed of how you want it and that your loved ones will be looked after. Regularly reviewing and updating your trust can give you further assurance of your estate's future when things become clear and stable for you and your beneficiaries.