Believe it or not, you don’t need an attorney’s help to create a living trust. While there are several inexpensive options available to help you draft a living trust, you can also use the following living trust checklist to “do it yourself”! Check it out below; then, contact A People’s Choice to learn other ways we can help.
1. Identify the assets you plan to put into your trust
When reviewing your living trust checklist, the first thing you should do is list the assets you plan to put into your trust. Start by making a list of all the contents of your estate. This should include your home and other real property, vehicles, bank accounts, retirement accounts, and life insurance policies. Then, from this list, you can choose which assets you would like to place into the trust.
Remember that some of your assets may be transferred through legal instruments other than a trust upon your passing. For example, while our clients typically put their real property into a trust, they often distribute other assets with pay-on-death provisions. Using a trust and other provisions can help you avoid probate.
2. Organize your paperwork
Gather together documentation pertaining to your assets. This should include the titles and deeds to real property, bank account information, investment accounts, stock certificates, life insurance policies, and other assets you will be using to “fund the trust”. Having this information available will make it easier to prepare your trust distribution provisions.
3. Select your successor trustee
A successor trustee wraps up a trust after the trust’s creator dies. Furthermore, the successor trustee manages the trust assets and distributes them as the trust documents direct. The trustee must identify and protect the trust assets, follow through with any other duties the trust instrument delegates, communicate regularly with beneficiaries, and end the trust upon its conclusion.
Keep in mind that you can appoint more than one person as the successor trustee. In fact, you may want to consider designating co-trustees with an alternate trustee in the event the first trustee is unable to fulfill their duties.
Most importantly, remember to discuss the role with the person you’re considering to make sure they accept the responsibilities assigned to them.
4. Select a guardian for minor children
If you have minor children, you have to decide who will care for all of them, should they require a new guardian.
Additionally, you will also need to decide who will manage and distribute any money a minor may receive in the future. In fact, managing an inheritance can extend beyond when a child reaches 18. Therefore, sometimes it is beneficial to spread out the distribution of inheritance monies to a young person over an extended period. For example, you could allow for monies to be managed by a trustee up to a specific age, say 35, with periodic distributions at ages 25 and 30.
5. Designate beneficiaries
A beneficiary may be a person or business enterprise such as a nonprofit organization. Usually, most people choose family, friends, and charities to inherit their property. Similar to selecting a successor trustee, be sure to choose alternate beneficiaries should a beneficiary predecease you.
6. Prepare the trust documents
Once you decide what property you want to put into a trust and appoint a successor trustee and beneficiaries, you should prepare your trust documents. California has specific requirements for writing trusts, so contact us for more information on properly filling out trust paperwork. In fact, A People’s Choice uses the same estate planning software as many California attorneys. Therefore, we provide you with the same documents at a fraction of the cost.
Furthermore, keep in mind that you have the option to create either a revocable living trust or an irrevocable living trust. As the name implies, an irrevocable trust can not be revised while you are living. On the other hand, a revocable living trust can be revised while you are living, but could become irrevocable upon your death.
Finally, you may also want to consider drafting a pour-over will and other standard estate documents. A pour-over will is meant to “catch” any asset that was not included in a trust. Additionally, a healthcare directive, for example, will address important end-of-life decisions and appoint someone to make sure your right-to-due wishes are complied with. Plus, a power of attorney will give a loved one the ability to handle your finances should you become incapacitated and unable to do so yourself.
7. Transfer designated property into the trust
Once you have prepared and signed your living trust, you will need to transfer your property into the trust. Then, the trust will be “funded” once it holds title to assets.
The specific method you use to transfer property and assets into your trust will depend on the type of property involved. For example, you will need to prepare a trust transfer deed to transfer real property into a trust.
A People’s Choice can help you complete this critical and very important step on your living trust checklist. Contact us for more information.
8. Store your trust documents in a safe place.
The final item of the living trust checklist is to store your trust documents in a safe place. More specifically, you should store your documents in a place your beneficiaries or successor trustee can access in case of your death. Therefore, if you store the documents in a safe deposit box, make sure your beneficiaries or another party has a key. You can also provide your family members copies of your trust.
Need more help preparing a living trust in California? Contact A People’s Choice for more information about preparing a living trust checklist and completing your estate planning documents.