When you begin thinking about creating an estate plan, a portion of that will be creating a trust for the property that you own. Trusts are flexible tools that allow you to direct how your assets are managed during your life and after your death. Below are the steps that you need to keep in mind when creating a trust.
Get Your Documents in Order.
Locate the property titles/deeds, investment account statements, checking/savings account statements, and life insurance policies you would like to transfer into the trust. Remember, a trust is only valid when you place/re-title assets into the name of the trust. Gather these documents/possessions now and have them ready so the process can go more smoothly.
Consider who will benefit from the trust assets (your beneficiaries), who will take over as trustee if something happens to you (successor trustee), and who will manage property for your beneficiaries (if applicable).
Set Your Goals.
Setting goals is an important next step in establishing your trust. What do you want to accomplish with your trust? Do you want to help a child/grandchild with his or her education? Do you have a favorite charity? Would you prefer to give everything to your beneficiaries outright? Or provide them assistance over time? This step of the process may take a great deal of thought: you'll need to consider your aspirations and aspirations for your legacy.
Based on your goals, tax situation, etc., the type of trust (for example, revocable or irrevocable) will be determined at this stage as well – your tax professional and legal counsel will provide assistance here.
Determine Who Will Draft Your Trust Document.
Finding an estate planning attorney to draft your personal trust document is important. Do you prefer an independent attorney in a small firm? Or do you prefer an estate planning attorney who is part of a larger firm? Either will have advantages and disadvantages, but it is important to find the one who is competent and one in whom you have confidence.
Choose a Successor Trustee.
Your trust should name someone to serve as your successor trustee – this would be a person or a bank trust department who would take over the trustee responsibilities of the trust if you become incapacitated or pass away. People may choose their spouse, grown child, or trusted friend. For some individuals or families, a corporate trustee may be the best option. The benefits of naming a corporate trustee, such as Frontier Bank Wealth Management & Trust, include management/investment experience, objectivity, fiduciary experience, and perpetual lifespan.
Prepare the Trust Document.
Work with the attorney you’ve chosen to create your trust document. Remember, no trust document is perfect! Once your trust is signed, you can always make updates/amendments as life changes.
Planning ahead with a living trust can help keep your assets in the family and out of the courts. If you’d like more information on creating an estate plan with Frontier Bank, click here. And if you have any questions about how to start the process of creating a trust, reach out to our Wealth Management & Trust team for the next steps.