• By: Legacy Law Centers
A living trust document, symbolizing estate planning and asset management guidance from Legacy Law Centers

Taking The First Step Of Creating A Living Trust

The first step is simple: meeting with a Legacy Law Centers’ attorney to discuss and define your goals. Are you looking for a simple way to transfer assets, or do you have specific concerns, like excluding certain family members or minimizing tax burdens? Once your objectives are clear, you can move forward from there.

As a general rule, we recommend placing as many assets as possible into the trust. Any assets left out of the trust will go through probate, which can be time-consuming and costly. There are exceptions to this, but they are few and far between.

After your death, a living trust becomes an administrative trust. The trustee you’ve appointed takes over and follows the instructions laid out in the trust. Institutions are notified, and the trustee essentially steps into your shoes to manage or distribute your assets.

The Role Of Trustees

Trustees act as managers of assets in a trust. While you’re alive, you’ll likely serve as your own trustee. If you become incapacitated or pass away, the trustee will manage or distribute your assets according to the trust’s instructions. The trustee can be anyone you trust to carry out your wishes—whether that’s a family member, a friend, or even a professional or corporate trustee.

A living trust becomes an administrative trust after your death. It’s essentially just changing the trustee and indicating that this person is now in charge. And when this person is in charge, these are the rules that are in place. Simply notify the relevant institutions of the changes that have occurred, and your trustee can take over and act on your behalf when needed.

Avoid This Critical Mistake!

One common mistake people make with living trusts is getting too specific and, thus, more often than not, restrictive in the trust’s terms. A living trust should be flexible enough to adapt to future circumstances. For example, specifying that your house must be sold immediately after your death might not be wise if market conditions are much worse than they were when you created the trust.

Would you really want your trustee to follow these broad instructions even if the housing market were to have just crashed and selling would result in a massive loss? It’s better to give the trustee discretion to make decisions based on the situation at the time so they can act in the best interests of your beneficiaries than it is to lock them into a rigid set of actions that may not align with circumstances that dramatically change over time.

Still Have Questions? Ready To Get Started?

For more information on Creating A Living Trust, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (571) 260-0827 today.

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