No matter the value of your estate, it is essential that you plan for what will happen to your assets after your death.
A living trust can give you the peace of mind not only that your family will be provided for but also that your wishes will be followed after your death.
When done correctly, a living trust can also allow a fast distribution of your assets, avoid unnecessary taxes and keep your wishes private as well.
As your living trust will be one of the most important documents drafted in your lifetime, you should be prepared before getting down to the business of writing one.
Here are five things you should do before writing a living trust:
1. Make a list of all your assets
Be sure to include make a list of your assets that includes everything you own. Assets are tangible items and intangible:This can include your house, jewelry, bank accounts, stock, and life insurance policies.
Having this list in front of you will give you a clearer picture of your estate and help you decide how you would like it distributed once you are gone.
2. Find the paperwork for your assets
Just as it is important to list all of your assets and their values before writing the living trust, be sure that you have all of the paperwork—titles, deeds, stock certificates, life insurance policies, etc.—in order and ready to transfer title ownership to your living trust.
3. Choose beneficiaries
You will have to name beneficiaries, those who will receive assets upon your death, so plan on who should get what before you sit down to write the living trust. Beneficiaries can include family, friends or organizations (including charities).
You may also want to consider who you don't want to get anything at all and discuss this with the attorney as well.
Keep in mind that if you have named beneficiaries on insurance policies or retirement or savings accounts, these will operate without the trust. So be sure to talk to an attorney about which assets will pass to beneficiaries via the trust and which ones will pass to beneficiaries without the trust.
4. Choose a successor trustee
With a living trust, you will usually name yourself as the trustee, so you continue to have control over your assets during the course of your lifetime.
Your successor trustee, though, will pay your debts and distribute your assets according to your instructions upon your death, so be sure to choose someone you trust.
Moreover, in the case of your incapacitation, your successor trustee would also be the one to handle your affairs.
5. Choose a guardian for your minor children
You should still consider who you would want to take care of them in case of your death.
You can include this information in a "pour-over will," which also provides for the distribution of any assets inadvertently excluded.
Find out more about Living Trusts