5 Essential Steps to Create a Living Trust
Most people don’t know the first thing about creating legal documents. Even if you know more than the average person, it may be limited to basics like the fact that you need a notary public to witness signatures made by the appropriate parties. It is for this reason that most of us continue to pay lawyers to draw up paperwork for us as needed. Of course, sites like Docracy.com have popped up across the web, offering free templates for those who feel confident in their abilities to pen their own contracts and other legal documents. But when it comes to creating a will, you have to be very careful to make sure that your legal handiwork can’t be contested after the fact. One easy way to avoid potential contention and transfer property after death is to set up a living trust, or a legal agreement that essentially passes on your property while you’re still alive. So long as you live, you can continue to use the property (a house, bank accounts, and so on), but when you pass away, the recipient named in your trust takes full ownership. So how do you prepare a living trust? Here are a few essential steps you must follow.
- Document your property. The first step to creating your living trust is documenting all of your property, which could include listing items of value, taking pictures of identifying numbers (serial numbers, VINs, etc.), and securing titles/deeds for your most valuable assets. You’ll want to collect all of this information to ensure that you have an accurate accounting of everything that will be passed along to others in the event of your death. Although you are only likely to list a single trustee in your living trust, that person will be responsible for fulfilling your wishes where your property is concerned, making sure the right items are passed along to the right people. And a full and accurate account of your goods, complete with identifying information, can definitely speed along the process.
- Prepare transfer deeds. In cases where property comes with a deed or title (houses, cars, other vehicles, etc.), you need to make sure that you draw up transfer deeds and include them in your living trust so that recipients can have proof of legal ownership and avoid any legal hassles.
- Understand associated legal jargon. Any time you’re creating a legal document you need to understand the language being used in order to avoid serious error. This doesn’t mean that you have to be able to read and understand every sentence, but you need to know what terminology like “grantor”, “trustee”, and “successor trustee” means, or more specifically, who these titles refer to (the first two will be you, while the third will be the executor of your trust).
- Research state laws. Every state has different laws regarding how living trusts are to be drawn up and executed, as well as the information that must be included, the property that can be included, and the steps that must be followed in order to make the final document legal and binding. So do some research for your state of residence to ensure you’re in compliance.
- Hire a qualified lawyer. While you can certainly save some money by completing a living trust on your own, and there are many resources available to help you with the task, you may still want to seek out a qualified law firm like Banks & Banks, Attorneys at Law, P.C. to handle the process for you. Since you aren’t trained as an attorney, there are any number of ways you could botch the process, leaving your heirs to squabble over your property for years after you shuffle off this mortal coil. When you hire an attorney you not only pay for expert legal advice, but in the event of an error that leads to litigation, your attorney should be able to speak to your intent and rectify the situation.