How to Manage a Living Trust

Your children won't need to go to court to receive the assets in your living trust.

A living trust is different from a will. A will is a document that explains who receives your assets upon your death. However, the assets aren't automatically transferred to those you designate. Before your children, for example, can inherit your home and other valuables, they will need to go through probate court, which ultimately decides how to distribute your assets. This could take months or years, and your children will most likely need to pay hundreds or thousands of dollars in legal fees. With a living trust, your assets are transferred automatically with no need for probate court or legal fees. While you're alive, you'll want to be managing your living trust carefully.

Instructions

1. Set up your trust. You should have help from a lawyer to make sure it's done properly. Decide which assets you want to transfer to the trust, and make yourself the trustee of the trust. Ownership of your assets is transferred to the trust, but you retain control over them as the trustee. Decide if you want to name someone else as the trustee, meaning they also control the trust. You should also name beneficiaries for your trust. These are the people who receive the assets of your trust once all the trustees die.

2. Add assets to your trust as you gain them. For example, if you purchase additional property, add it to your trust as soon as possible. In the event of your death, you want that property to be protected by your trust along with your other assets.

3. Add beneficiaries as your life situation changes. An example might be if you have another child. That child will need to be added as a beneficiary. Again, if you were to die, you need to make sure that child receives the same portion of your assets as your other children.

4. Make other changes to your trust as necessary. For example, if you sell property, you'll need to remove it from your trust by transferring ownership from your trust to the new owner. If your co-trustee dies or becomes incapacitated, you may want to name a new co-trustee, and if one of your beneficiaries dies, you should remove them as a beneficiary of your trust.

5. Sign your living trust after any changes are made. All trustees, including you, should sign the trust each time a change is made. This is necessary while managing your trust to keep is valid and legal.

References

• The Lectric Law Library: Your Money Matters