Basic Steps in Creating a Trust: Part Two

In the first part of this post, we covered the initial basics in setting up a trust. Determining your purpose for creating the trust is certainly one of the most important steps, as are determining which individuals will be involved in the trust and how you want to go about establishing the trust. However, once the initial legwork is done, you need to focus on making sure that your trust will be able to fulfill the goals you have established it for. Working with an experienced estate planning attorney is an important part of making sure your trust continues to comply with changing laws and continues to retain value so as to meet the goals you have established for it.

Funding Your Trust

Once you have created a living trust, you need to appropriately fund it. One of the basic reasons many people have for establishing a living trust is so that the assets they want to place into it can avoid probate. To that end, it is important to make sure you have properly transferred the correct assets into the trust. Real estate assets are often one of the most important assets for a trust, but you will also want to consider the benefits of transferring your personal assets into the trust as well depending on what your ultimate goals are. Transferring assets to fund the trust can be as simple as changing title to some assets while other can involve a much more complex process.

An experienced estate planning attorney can help you understand exactly what assets may qualify for the type of trust you have decided to create and exactly how you can go about transferring those assets into the trust. They can also work with you to better understand how those assets will be distributed, which could impact tax obligations or other potential financial obligations for your heirs.

Maintaining Your Trust

One of the most overlooked aspects of maintaining a trust effectively is making sure that you have talked with all of the individuals that have a stake in the trust. Talking about death is never pleasant, but communication is an important part of every comprehensive estate plan. You need to make sure that all interested parties are aware of the trust, how it works, and what process they will need to engage in after your death in order to access assets in the trust. This can save a lot of time and energy later.

It is also important to make sure you revisit your trust, and all of the components of your comprehensive estate plan, every few years and after any significant events have occurred like divorce or the birth of a grandchild. You may want to revisit your trust to transfer newly acquired assets to it or simply to see how new laws on both the federal and state level might affect your trust. Doing so can help you and your loved ones avoid unexpected surprises when the time comes for your trust to distribute the assets within it. Experienced estate planning attorneys often include periodic estate plan reviews in their estate planning services, and this can be a very helpful tool to make sure that any trust you create continues to serve the purpose for which it was established.

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