A living trust, or revocable trust as it is also called, can be used to ensure you have someone to manage assets in case you become incapacitated. You can also facilitate the quick and easy transfer of property to heirs after death through the use of a living trust. While a living trust does have some limitations, including not being effective at reducing estate taxes or protecting assets from counting when qualifying for Medicaid, many people do opt to create a living trust because of the many advantages of doing so.
If you plan to create a living trust, you need to ensure that you take the right steps to do so. In general, it is helpful to get legal advice both to make the determination of whether a living trust is actually the correct choice for you and to ensure that you have gone through the steps of creating the trust properly. A Montpelier living trust lawyer at Unsworth LaPlante, PLLC can provide you with assistance with every necessary step of creating a living trust so you will be able to ensure that the trust is legally valid and provides the advantages that you have been looking for.
Steps Involved in the Creation of a Living Trust
The rules for living trusts are established in Vermont Statutes Online Title 14A, Chapter 6. Trusts are assumed to be revocable, or assumed to be living trusts, when you create them unless you specify otherwise. The steps that you will take to create this type of trust should include the following:
- Define your goals for trust creation. Are you hoping to protect your assets, to create a plan for potential incapacity, to avoid probate, or to control what your heirs do with an inheritance when you are gone? You need to ensure you know what you are trying to accomplish and make sure that a living trust will actually provide you with the benefits and protections that you are looking for. Your attorney can advise you on what type of trust or other estate planning tools are the best for you.
- Determine whether your trust should be shared or individual. If you are married, you need to consider whether a shared trust is the right choice or an individual trust. Consider the amount of jointly-owned property as you make this decision.
- Determine what assets should be transferred into the trust. You may not want to move all of your money or property into the trust, but instead should generally focus on larger items and assets that you want to ensure are transferred outside of the probate process.
- Determine who should inherit the property that you are putting into the trust. Charities, family, and friends are often named as beneficiaries. You should choose contingent or alternate beneficiaries as well, in case those who you originally intended to inherit pass away before you do.
- Select a trustee and a successor trustee. You will typically be the trustee for the living trust over the course of your life. However, you want to select someone to serve as a trustee in case you become incapacitated and after your death. The successor trustee can take over management of assets when you become unable to manage them and can help to facilitate the distribution of trust property. Many people select a family member or close friend to serve as a successor trustee. You are permitted to choose a successor trustee who is to receive trust property after death.
- Determine if you need someone to manage property for minors. If any of the people who you are leaving money to in your trust are going to be under the age of 18 when they inherit, you will need to give an authority to manage the money for them.
- Prepare the trust instrument. This can also be called a living trust document or a declaration of trust. You will want to get an attorney’s help with this part to ensure that the trust can serve the purposes you need it to serve and to ensure the trust is created correctly. When you have prepared the trust document, you will need to sign it and have it notarized.
- Transfer the title to property to the trust. Just creating the trust is not enough- you actually have to fund it.
An attorney can provide assistance with all of these steps to ensure that your living trust is created properly.
Getting Help Creating a Living Trust from an Estate Planning Lawyer
Unsworth LaPlante, PLLC has extensive experience with the creation of living trusts. To learn more about whether a living trust is the right choice for you, join us for a free seminar or contact us to get advice specific to your situation. You can give us a call at (802) 879-7133 or contact us online today so we can help you to create your living trust.