Preparing for a Meeting with an Attorney to Set Up a Living Trust
Introduction
Setting up a living trust can be a critical step in ensuring your financial and legal peace of mind. If you're preparing to meet with an attorney to establish a living trust in your name, there are several important steps you need to take beforehand to ensure the process is as smooth as possible. This guide will walk you through what to prepare, the types of trusts, and other essential considerations.
What to Prepare Before Your Meeting
When meeting with an attorney to set up a living trust, you'll need to bring a detailed collection of documents and assets to ensure that the trust accurately reflects your wishes and planning needs. Here are the key items you should prepare:
1. Identifying Your Trustees and Backup People
Your trustees are the individuals who will manage the trust. Identify who you trust with the responsibility and consider a backup in case your first choice is unavailable.
2. Purpose of the Trust
Clearly define the purpose of the trust. Is it to protect assets, manage them for your benefit, or for the benefit of your beneficiaries? Consider specific goals like estate planning, supporting dependents, or charitable giving.
3. Your Will and Disposition Desires
Review your current will and determine any specific desires related to your property distribution, particularly any funeral arrangements or life insurance policies.
4. A Comprehensive List of Assets
Compile a detailed list of all your assets, including:
Real Estate: Parcel numbers, purchase dates, purchase prices, mortgages, rental information (if applicable) Other Assets: Automobiles, stocks, 401ks, other investments Life Insurance: Carriers, policy numbers, amounts, beneficiary designationsTypes of Trusts and Their Features
Not all trusts are created equal. Understanding the different types and their characteristics is crucial for finding the right tool for your situation:
1. Living Trusts
A living trust is a type of revocable trust. You retain control of the trust assets during your lifetime, and the trust only takes effect after your death. This allows you to avoid probate and manage your assets while you're alive.
2. Revocable vs. Irrevocable Trusts
Revocable Trusts: You can change the terms and revoke the trust at any time.
Irrevocable Trusts: Once the terms are set, they cannot be altered, providing more tax benefits and asset protection.
Maintaining and Managing Your Trust
Proper management of a trust is essential for its effectiveness. Understand your responsibilities as trustee and take steps to ensure the trust operates according to your intended design.
1. Understanding the Rules
Read the trust document thoroughly. It will provide instructions for managing, investing, and distributing trust assets. Understand your authorities and how to use the funds.
2. Contacting Trust Advisors
Meet with other advisers involved with the trust, such as the original attorney or current trustees. They can provide valuable insights into the trust's history and intended use.
3. Asset Investment and Taxation
Know how your trust assets are invested and why. Are they aligned with your overall investment strategy? Understand the tax treatment and implications of the trust’s income and distributions.
Finally, consider the impact of your trust on creditor protection and divorce proceedings. Some trust structures can offer better protection, but legal advice is necessary.
Conclusion
Preparing for a meeting with an attorney to establish a living trust involves detailed planning. By understanding the types of trusts, what to prepare, and the responsibilities involved, you can ensure that your trust meets your long-term financial and legal goals.