A trust can be a powerful estate planning tool – it allows property to avoid probate, and in the case of living trusts, can establish a method of managing property and finances in case of incapacitation. While a trust attorney works with you to create a trust, there are several questions that you will need to address in the process….
1. Who are the beneficiaries? In the case of living trusts, you may be a beneficiary, but will still need to name successor beneficiaries for the trust.
2. Who will be the trustee? Again, in the case of living trusts, you may handle the trustee duties, but will need to name a successor trustee that can take over duties upon a specified event, such as your incapacitation or death.
3. When will the trust make distributions? Often trusts begin making distributions to beneficiaries when they reach specified ages.
4. How should the trust assets be invested? Depending on the goal of the trust, you may want to advise how the portfolio will be invested, such as for growth, value or to generate income.
5. What are the trustee’s powers when it comes to making distributions? You may make these powers either broad, allowing the trustee to exercise discretion, or narrow, such as paying out income for specific purposes such as educational expenses.
6. Can the beneficiaries remove and replace the trustee? This should be spelled out within the trust documents.
7. How long should the trust last? A trust can be set up to end with a specified event, such as a beneficiary reaching a certain age, or to continue for a longer timeframe for asset protection purposes.
Creating a trust can benefit many estates, but a trust attorney can best advise you of which trust will best meet your estate planning goals.