What Is a Probate Sale? How to Set Up a Living Trust

What Is a Trust vs. a Living Trust?

The term trust is a general term for an arrangement in which another individual or corporation is responsible for the control or management of someone else’s assets. A living trust is one type of trust that people use in estate planning to determine who receives your assets after you pass away.

Irrevocable Living Trust vs. Revocable Living Trust

There are two different types of living trusts: revocable and irrevocable. As the names imply, an irrevocable living trust is permanent. To make changes or take out assets, each person named in the trust must give permission.

In a revocable trust, you have more flexibility. You can add or remove beneficiaries and properties, and you retain control of your assets. However, there are also different tax implications for each kind of living trust.

How to Set Up a Living Trust

In order to set up a living trust, there are several steps that you must take. First, you need to decide if you are going to file a single trust or a joint trust. If you are unmarried, you will file a single trust, but if you are married, you have the option to file either type of trust. A joint trust will let you include both property that each trustee owns separately as well as together.

Next, you need to determine what you are going to include in your trust. How much property do you have? What other assets do you possess? You need to take stock of your finances and assets before proceeding to choosing a trustee, which is the next step.

The trustee is the person who manages the assets within the trust. Usually, this is the person who makes the trust, and then they name a successor trustee to take over in the case of death or incapacitation.

The last steps of filing a trust are to draw up a trust document, usually with the help of a financial advisor or a lawyer. Next, you will sign the trust in front of a notary. Finally, you will transfer your property to the trust, which is known as “funding the trust. ”

Conclusion

A living trust is a type of arrangement that people set up in order to determine what will happen to their property and assets when they die. To set up a living trust, you will need to talk to an attorney or financial planner.