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5 Things To Know About Creating A Trust

by Marie Caldwell

Do you want to ensure that your inheritance is passed down to your family as intended? If so, consider setting up a trust as a way to pass on money, property, and other assets after you pass away. Here are a few things you should know about creating a trust.

Trusts Need To Be Funded

You need to decide what assets you are going to put into the trust to fund it. When you do this, you are essentially taking the asset out of your name and putting it in the charge of the trust. A revocable living trust allows you to make changes to the trust while you are still living, which includes moving items in and out as you deem necessary.

Trusts Need Beneficiaries

You also need to assign people as beneficiaries of your trust. This often includes your close family members, but it can be anyone that you want. You can even put charities as beneficiaries. In either case, the trust needs to have beneficiaries in order to receive assets. 

Trusts Have Rules

One of the nice things about a trust is that you can set the rules for how assets are distributed. This means that you can assign a child as a beneficiary of a trust, but only allow them to gain access to money for college once they are an adult. You can also make receiving assets from the trust conditional as well. For example, you could have additional money given to a child after they complete college, get married, or reach some other life milestone. 

Trusts Need A Trustee

A trust needs to have a trustee, which is the person that manages the trust and ensures that all of the rules are being followed. They would be the person that is in charge of distributing assets to beneficiaries one they are allowed to be released. A trustee can be a person that you believe will follow your instructions, or it can be an unrelated third party that is paid to be responsible for managing your trust. 

Trusts Should Be Set Up By A Lawyer

As you can imagine, it is complicated to set up a trust to work the way that you want it. Work with a firm that specializes in estate planning to help set up your trust the right way for you and your family. For more information, contact a will and trust attorney.