Setting up a trust involves many steps, but the first step is deciding how you want your assets to be managed. You can designate a trustee, an attorney, or trusted family member to manage your trust’s assets. These individuals will uphold your wishes and distribute funds according to the trust’s terms. In your trust, you can decide whether to distribute funds as a lump sum at a certain date, or to specific individuals or nonprofit organizations. You can also specify specific distribution methods, such as a specific amount paid out monthly.
Another important consideration is cost. While trusts are more expensive to set up and maintain than wills, they can save your heirs money by eliminating the need for probate. They are also more complicated to draft than a will, and estate planning attorneys can be very expensive. However, these extra costs are well worth it if they avoid exposing your assets to probate.
A lawyer can create a trust for a set fee, which can be anywhere from $1,000 to $7,000. The cost depends on your particular financial situation, and whether you need a revocable or irrevocable trust. Some attorneys also offer comprehensive estate plans that include a will, healthcare power of attorney, and a living will. In addition to trusts, they can also modify some assets’ ownership.
Once your trust is set up, you will need to designate a trustee. This person will be responsible for managing the trust’s assets. They should be able to protect your assets and distribute them to beneficiaries according to the terms of the trust. If they do not meet these conditions, your beneficiaries can choose another trustee.
A trust can be simple one year and complex the next. The final year of a Trust is the most complicated, because all of the trust’s principal must be distributed. However, the other years are simple. A trust that allows you to distribute some of the trust’s income is not complicated, but those that permit you to collect income are complicated.
You can also involve the trustee in the trust creation process. This can make the process go more smoothly and help the trustee understand your assets. Providing more information and clarity will make your trustee’s work easier and help head off conflicts between the beneficiaries. It may also be beneficial to hire a corporate trustee for the management of the trust. They can provide professional management, protect family relationships, and ensure continuity. In addition, a trustee can be very helpful in case of a dispute with beneficiaries.
Whether you’re planning for a divorce or just want to control how your children receive their money after your death, a trust can help keep your assets private and out of the hands of the court process. This means that your estate will be distributed faster and easier after your death. It also eliminates the need to have a lengthy probate process.