Have you started planning for your future? Do you know what will happen to your property and assets when you die? Will it all go into probate for months on end while your grieving family has to sit and wait on a decision to be made by the court to validate or invalidate your will? Or do you have a living trust set up that will avoid probate altogether? If you do not currently have a living trust, you definitely need to consider one for yourself. Read on to learn more about trusts, probate and how to set up a trust.
What Is a Trust? What Is Probate?
Some people will confuse a will with a trust, but these two documents are very different from one another. A will simply specifies what will happen when you die, whereas a trust is actually a document that can be utilized while you are still alive. In either instance, though, it is a set of guidelines of how you would like your property and assets managed. Probate is known as the legal process of where a will is approved and accepted in a court. Property is distributed among creditors and heirs during this time. It can be very time-consuming and sometimes costly. A trust is often used to avoid the probate process since the trustee will simply follow the directions set forth in the trust. This is not something that can be done with a will.
What Needs to Be Specified in the Trust Document
To draft a trust, you will need to first create a trust document. This document needs to contain certain information, including these five pieces of details:
- Trustee – The trustee is the individual who you will appoint to be in charge of your trust and carrying out its instructions. For a living trust, it is possibly to name yourself as the trustee.
- Successor Trustee – If you ended up naming yourself as the initial trustee of your living trust, then the successor trustee will be the individual that will take over the trust management when you pass away or become incapacitated. In some cases, it may be in your best interest to name two or three individuals in the event that one passes away themselves or that one decides that they would rather not have the responsibility of managing your trust.
- Beneficiaries – The beneficiaries are the individuals who you would like to leave your property and/or assets to.
- Trust Property – The trust property will be the property and/or assets that you will be leaving to your beneficiaries. You will want to describe the property in as much detail as possible to avoid any potential confusion down the road.
- Instructions for Management and Distribution – The instructions are exactly that: instructions for the trustee or successor trustee of distributing your property and/or assets. How do you want them to manage your trust? How do you want your property divided? Who will get how much money and when will they get it? How would you like your money invested?
This can all be a bit overwhelming, so it may be a good idea to hire an experienced estate planning and probate attorney to provide professional guidance. For more information, contact Davis & Mathis or a similar firm.