A living trust is a great tool that allows you to protect the estate you’ve worked hard to establish. Like a will, this document explains what you, the grantor, want to happen to your assets, detailing who should get what and when. Unlike a will, however, a living trust takes effect during your lifetime. If you are incapacitated, it ensures that an appointed individual or organization (the successor trustee) controls your assets based on your wishes. If you pass away, it also keeps your assets from having to go through the time-consuming and costly probate process.
Is a Living Trust Right for You?
Not everyone needs a living trust. You’re a good candidate if you:
. Are older (over age 55)
. Have health concerns
. Your estate is larger, containing more assets you could lose in probate
. You have a business or other assets that probate would affect negatively
. You’re unmarried or don’t plan to leave your assets to your spouse
Key Steps to Creating Your Living Trust
To create a trust, you need to know what assets, or corpus, you have and want to include in it. Thus, start by going through your property. Make a list of “big ticket” items you want to keep out of probate, noting their worth and organizing any paperwork that might be associated with them. Then decide which person or agency you want to serve as your successor trustee. Normally, a living trust has you be both the grantor and trustee so you keep control over your assets. Your successor trustee takes over for you only when you are incapacitated or die. Next, decide which people or organizations you want to get your assets (beneficiaries). You may choose alternate or contingent beneficiaries if desired, and beneficiaries may serve as successor trustees. Lastly, prepare your living trust document, either as a “shared trust” (best if you and your partner/spouse share most of your property together) or an individual trust (best if you’re not in a relationship and/or you alone have the title to most of your property). You can do this on your own if you prepare well, but a licensed trust attorney in San Marcos CA often can make the process more efficient and help you avoid mistakes.
A living trust functions much like a will, but it has some key differences. It takes effect during your lifetime and keeps assets out of probate. The steps to creating this important document take time, but given the protection they ultimately yield for you and your loved ones, they are well worth completing.