Creating a living trust

On Behalf of | Mar 24, 2022 | Estate Planning |

A living trust, also known as an inter vivos trust, is a legal document that allows you to appoint someone to manage your assets and financial affairs while you’re alive for the welfare of the beneficiary. After the trustor’s death, the trustees will manage the trust according to the trust agreement terms.

A living trust is different from a will in that the assets in a living trust don’t have to go through probate when you die. This can be very helpful if you want to avoid the hassle and expense of probate. It means that when you die, your assets can be passed directly to your trustee rather than being tied up in legal processes over a long time.

Here are some of the steps you should take to create one:

1. Audit your assets

Ideally, you should include all your assets, for example, property, accounts, jewelry and artwork. You can leave out depreciating assets such as cars and boats as well as non-probate assets such as life insurance policies since those already go directly to your trustee.

2. Choose a successor trustee

Most people choose to manage their own trusts but you can appoint a trustee if you prefer. In the event of your death, you should already have a successor trustee in place to take over for you.

3. Draw up the trust document

As long as the Declaration of Trust meets California’s legal requirements, then it is considered valid. Because there are a lot of nuances in the law, it’s best to have professional legal guidance.

4. Engage a notary

Signing your documents in front of a notary ensures their authenticity and can eliminate questions about whether or not the documents are valid later.

5. Transfer your property

After signing your trust document, transfer all the assets you decided to put into the trust into that vehicle for future management.

A living trust requires a lot of maintenance and takes time and effort to set up. Setting up a living trust can save your beneficiaries a lot of hassle and prevent conflicts when you pass away.