Even though the modern revocable living trust is one of the best estate planning tools you can use, a lot of people are reluctant to use them because they do not understand them. The best estate plan is one you make with the advice and guidance of your attorney, but it is also one with which you are comfortable.
If you create any estate planning tool, such as a living trust, but don’t really understand why you are making it or what its function is, you aren’t going to get the most out of your plan. To help educate you about living trusts in Rochester, we’ve come up with this brief list of three tips you might want to consider.
Living Trusts in Rochester: 3 Tips
1. Think of your trust as a small company.
Most people are uncomfortable with the idea of a living trust because they have no experience with them. We can get past this discomfort if we use something that we are more from earlier with, such as the idea of a corporation. A corporation is a legal entity that exists separately from the people who create or manage it. The corporation can own property and can continue to exist even after the original owners have died.
Living trusts share these qualities as well. When you create a living trust you create a kind of legal entity. This entity can own property and can operate even after you become incapacitated or die. This is useful because you can use your trust to pass your personal property to others after your death.
2. The living trust owns the property you own.
After you create your living trust you will have to take the property you own as an individual and transfer it into the trust’s name. This is called funding. Funding the trust properly is one of most important steps of the process.
3. You control your living trust.
When you create a living trust you also have to name some essential people who play key roles in the trust’s operation. The first person you have to choose is the beneficiary. The beneficiary is the person who gets to use the property the trust owns.
Second, you have to choose a trustee. A trustee will manage the trust in much the same way that a CEO will manage a corporation. The trustee has a responsibility to manage the trust property so that the beneficiary will be able to obtain the maximum benefit.
What’s vital to understand is that you will serve as both the beneficiary and the trustee of your trust. In other words, as long as you are alive and mentally competent, all the property your trust owns will never be outside of your control.