A revocable living trust is the perfect document to protect your privacy, avoid probate, and leave someone you trust in charge of managing your affairs if you become incapacitated or pass away. It’s an essential element for estate plans and gives the trust maker, also known as the Grantor, the peace of mind that their interests are protected, and their wishes carried out. Here are five steps an Orange County trust attorney will ask their clients to think about when starting the process of creating a revocable living trust.
1) Set your goals
Each individual has different estate planning goals, many of which can be achieved with a revocable living trust. When starting your own estate planning journey, think about your desires and write them down. For example, if keeping your financial and personal affairs private and avoiding a long, drawn out probate proceeding is of utmost importance to you, then that goal should be at the top of your list. If you are worried about money going to your kids before they are mature enough to handle it, or you just want to have as much control as possible over what happens to your affairs and everything you worked so hard for… be clear about what you want so that you have every tool necessary at your disposal to do something about it.
2) Decide what needs to be protected
A trust truly comes into effect when it’s funded, or when you transfer ownership of your assets or property into the trust. Many people put real estate into trusts, since a house is often the most valuable asset a person owns. Solely-held financial accounts should also go into the trust, but jointly-held accounts should not. A trust attorney can help you decide the specific assets to transfer into the trust, and it’s important to make sure this actually happens so the trust works as intended.
3) Choose a successor trustee
A successor trustee is not only responsible for estate administration after death but may also handle your affairs if you become incapacitated or do not want to handle your own affairs at a certain point. The successor trustee is also in charge of the property or assets left to minors in your trust. This is a very big job with serious repercussions if it’s not carried out correctly, so take your time and choose someone who you believe is the best fit.
4) Choose your beneficiaries and any stipulations you want placed on their inheritance
It’s ultimately your choice who you want to leave a financial legacy to in your living trust. If you leave out a family member who expects to receive an inheritance from you, it may be a good idea to leave behind an explanation of your wishes to avoid conflict down the road. The other great thing about a trust is that it gives the creator control over how the money in the trust is used. For example, if you want your kids’ inheritance to be used for college expenses, a down payment on a home or a wedding only—you can specify that in the document. You can also make trust distributions conditional on your heirs meeting certain requirements, such as maintaining a certain grade point average, maintaining sobriety, reaching a certain age, and so forth.
5) Find an experienced trust attorney
Do-it-yourself trust programs and cheap alternatives are inadequate and generally do not hold up under court scrutiny. That’s why it’s important to do find an experienced attorney to draft your trust. This way, you’ll know that it’s done correctly, and your wishes will be carried out as you expect.
If you’d like to learn more creating a revocable living trust, please call us at (949) 260-1400 to set up an initial consultation.