Our Florence living trust lawyer believes that a living trust can be an effective tool for constructing your estate plan. This is because living trusts are very versatile and are usually a great fit for most people and their goals. You don’t have to be super rich to benefit from a living trust, either. Regardless, if you do not properly fund your trust, there could be serious consequences. Let our Florence living trust lawyer explain what happens if you leave assets out of your trust.
Understanding How Living Trusts Work
One estate planning device you must consider before you make any final decisions about your actual plan is the revocable living trust. Contrary to what many people believe, you do not have to be a millionaire to benefit from the creation of this type of trust. Plus, you do not surrender control of assets that you convey into a revocable living trust. You can act as the trustee while you are living, and you can also act as the initial beneficiary. You can change the terms of the trust, and you can even rescind or revoke the trust entirely at any time. These are some of the reasons our Florence living trust lawyer recommends living trusts.
The Many Advantages of a Revocable Living Trust
If you create a living trust, you can serve as the trustee of your own trust while you are alive. As the trustee, you would be solely responsible for the trust administration tasks, and you could also act as the beneficiary. The beneficiary is the person who can receive monetary distributions from the trust.
Since you can act as the trustee and the beneficiary initially, you retain control of your trust throughout your lifetime. The transactions involving the trust are totally in your hands and you include or remove resources from the trust at any time. Let our Florence living trust lawyer explain how these trusts work.
Your Living Trust can be Modified
In addition to many other benefits, these trusts are revocable. You would have the power of revocation, so you could dissolve the trust entirely if you ever wanted to call the whole thing off and take back direct personal possession of the assets.
How to Fund a Living Trust
When you transfer assets into the living trust, you are funding the trust. To do this, you change the ownership of the property that you want to convey into the trust. You make the trust the new owner of the property. You would typically list the property that you are conveying into the trust in the trust declaration.
It is also possible to list this property on an additional document called a schedule. Another option would be to use the trust agreement to transfer the property to the trustee, and again, you will act as the trustee while you are living so you are not surrendering control of the property.
Florence Living Trust Lawyer Explains the Purpose of the Trust Declaration
You create a trust declaration and you name a successor trustee to take over the role after you pass away. This trustee could also be empowered to administer the trust in the event of your incapacitation, or you could name a disability trustee and a different trustee to handle the business of the trust after you are gone.
In your trust declaration, you leave behind instructions about the way that you want assets to be distributed to the beneficiaries. You can allow for lump sum distributions of the assets, but you can also instruct the trustee to distribute limited assets over an extended period of time. Upon your death, the trustee would follow these instructions. Assets would be transferred to the beneficiaries according to your wishes.
How to Handle Assets Left Outside of Your Trust
When you create your estate plan, you should execute a pour-over will to sit beside your living trust. If you have any assets that are still in your name when you pass away and these assets do not have beneficiary designations, this will would pour these assets into the trust; but this means the court has to be involved in your estate. If you need help with this issue, let our Florence living trust lawyer provide that guidance.
If you do not have a pour-over will, and you have no documents other than the trust, the assets that were in your name would be distributed according to state probate law. The state would determine the way they should be distributed.
Join us for a FREE seminar today! If you have questions regarding funding a trust or any other trust administration matters, please contact the experienced attorneys at The Potter Law Firm for a consultation. You can contact us either online or by calling us at (859) 372-6655 (Florence, KY) or (606) 324-5516 (Ashland, KY), or for individuals in North Carolina, at (704) 944-3245 (Charlotte, NC or Huntersville, NC). We are here to help!
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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