Setting up living trust professional#

It is the trustee’s hard work that makes a trusted reality. The human element is important – without it, trusts are an intangible entity with a set of written rules and conditions no one is aware of. As an estate planning tool, trusts are only as effective as their trustee. Once you have the beginnings of a trust, you will need someone to administrate it after you are gone. They will be able to further inquire into your estate needs and will have a much better idea of how your first trust document draft should be written. Take your time with these questions and bring them to the attention of an estate planning professional. Would your estate benefit from a life insurance policy – and if so, would the payout be enough to tip you over the estate tax exemption limit? Do you have a surviving spouse you can share the limit with, and if so, have you considered an AB trust? What are you worried about the most? What do you have to consider when leaving behind wealth for your loved ones? What would you want your next of kin to consider when using their inheritance? How do you plan to preserve and continue to grow the family’s fortune over generations – or do you intend to let your children decide that?įinally, there are other practical considerations to keep in mind. Every estate is different, and your estate’s unique needs and problems will determine what kind of a trust you should draft or have drafted. Step 1: Setting Up a Living Trust Documentīecause trusts are so flexible, the first thing you should do is think about what you need. With all that said, your first step in setting up a living trust is simple: finding the right partner. Some trusts specialize in protecting overseas assets, while others allow you to make generous charitable contributions with your estate while ensuring that your loved ones receive a sizeable income from the same trust. Trusts can be written plainly to avoid probate and minimize tax costs, or they can be structured to provide income to a loved one for decades after your death or to make the most of the family fortune and avoid the consequences of the generation-skipping transfer tax. Then there are carefully worded, finely structured exceptions where a trust may act as a grantor trust – maintaining some of your rights to the property therein – yet remain irrevocable otherwise. On the other hand, irrevocable trusts greatly limit your access to whatever is funded into the trust, which is a matter to consider in and of itself. Still, the trust contents remain at least partially tied to you, which limits the degree to which they can be protected from taxes and creditors alike. Revocable trusts give you greater flexibility during your lifetime. It starts with several basic decisions, such as deciding whether the trust should be revocable or irrevocable. Another complicating trust is that a few distinct parameters can massively impact how the trust can be used. In other words, there are no (good) templates.

Setting up living trust professional#

Even a skilled estate planning professional would be wary of offering you a cookie-cutter trust solution. The grantor sets the terms and conditions of the trust entity through a trust document and gives a trustee limited administrative rights to oversee the trust, either immediately or after the grantor is no longer involved.įinally, the beneficiary reaps the benefits of the trust, either through income and periodic distributions or through its eventual bequeathment and resolution. Understanding How Living Trusts WorkĪt its core, living trusts are an agreement between three parties. Setting up a living trust is no easy feat, and while you should certainly take advantage of the flexibility and efficacy of trust as your primary estate planning tool, understanding how it works, what is expected of you, and what is in store for you in the long-term, is crucial.

What level of control do you retain after a trust is in effect?.

How can you ensure your trustee will do as they should?.

Can trusts be written from modified templates?.

How often should you revisit your trust?.

There are questions to answer and worries to address:

But setting up a living trust and planning to create one are two different things. Or maybe, you are just a very cautious person and feel that a trust would be much more flexible than a simple will.

Or maybe you need a contingency plan for your family’s financial health.