As both your family and your estate grow, so will your estate plan. Additional estate planning tools and strategies will be incorporated into your plan to ensure that all your estate planning goals are met. One of the most common tools is a trust agreement. If you decide to include a trust in your estate plan, an Ashland trust attorney at Potter Law Firm explains five common steps to creating a trust.
- Define your trust purpose. Although it may seem like an obvious step, it is important to understand that defining your trust purpose with as much specificity as possible will greatly increase the success of your trust. Narrowing down your trust purpose and goals is a critical first step given that trusts have evolved to the point where there are now different trusts to help meet almost any estate planning goal. Every trust must have a trust purpose that can ultimately be referred to by the Trustee or a judge when making critical decisions relating to the trust.
- Decide on the type of trust you need. All trusts fit into one of two categories – testamentary or living (inter vivos) trusts. Testamentary trusts are typically activated by a provision in the Settlor’s Last Will and Testament and, therefore, do not become active during the lifetime of the Settlor. Conversely, a living trust activates during the Settlor’s lifetime. A living trust can also be revocable or irrevocable.
- Choose your Trustee. Given the importance of the duties and responsibilities, your Trustee will have, choosing your Trustee should be done with care. Your Trustee is responsible for managing and investing trust assets as well as administering the trust. The duties and responsibilities of a Trustee are numerous and diverse, requiring you to spend a considerable amount of thought deciding whom to appoint as your Trustee. Ideally, your Trustee would ideally have a legal and/or financial background to ensure that he/she can administer the trust successfully. Depending on the size and complexity of your trust, choosing a professional Trustee may be your best option.
- Draft the trust agreement. In the internet age, it can be tempting to try and go it alone using DIY legal forms found online. In the long run, doing so is likely to cost you and your loved ones a considerable amount of time and money. Instead, allow your estate planning attorney to draft the trust for you. As the Settlor of the trust, however, you will decide on the terms used to administer the trust. You will use those terms to decide when assets can be distributed, how assets should be invested, and how much discretion you want your Trustee to have, among other things. As the Settlor, you can include any terms you wish if they are not illegal, impossible, or unconscionable.
- Fund your trust. Every trust must be funded. You can use almost any type of asset to fund your trust; however, the trust purpose and type of trust created may dictate the types of assets you use. Then you must convert the assets into the name of the trust. This can be as simple as transferring cash into the trust or as complex as re-titling real property into the name of the trust.
Contact an Ashland Trust Attorney
For more information, please download our FREE estate planning worksheet. If you have questions or concerns about including a trust in your estate plan, or you are ready to get started drafting a trust agreement, contact an experienced Ashland trust attorney at the Potter Law Firm by calling 606-324-5516 to schedule your appointment; you can reach our Charlotte and Huntersville, NC offices by calling 704-944-3245.
John Potter is an Estate Planning and Elder Law attorney in the Charlotte, North Carolina, area with offices in Ballantyne and Huntersville. John has been designated as a Certified Elder Law Attorney (CELA) by the National Elder Law Foundation and a Board Certified Specialist in Elder Law by the North Carolina State Bar.
John’s practice focuses on the use of Wills and Living Trusts in Estate Planning to help individuals protect their families and preserve their legacies after their deaths, but his practice also focuses on the critical issues of protecting individuals with dementia or other diminished capacity, assisting individuals in qualifying for Medicaid and other government benefits to offset the costs of long-term care, and providing special needs planning.
John is admitted to practice law in North Carolina, South Carolina, Kentucky, and Ohio, and he is accredited by the Department of Veterans Affairs.
John’s practice focuses on the use of Wills and Living Trusts in Estate Planning to help individuals protect their families and preserve their legacies after their deaths, but his practice also focuses on the critical issues of protecting individuals with dementia or other diminished capacity, assisting individuals in qualifying for Medicaid and other government benefits to offset the costs of long-term care, and providing special needs planning.
John is admitted to practice law in North Carolina, South Carolina, Kentucky, and Ohio, and he is accredited by the Department of Veterans Affairs.
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