A Living Trust is a great thing to have as you can easily alter it based on your changing needs. It is also a great option for you if you prefer to avoid the longer and more complex process that is probate.
While you can certainly consult a lawyer to assist you or even look over your trust, you can actually prepare your documents yourself. It may be hard to believe, but it is very much possible.
In this article, we will share how you can conveniently draw a perfectly legal living revocable trust. Read on to learn how living revocable trusts help when it comes to avoiding probate, and how you can make one yourself.
Let’s get started.
What is a Living Trust?
A living trust refers to a way through which it becomes easy to manage your assets and estate while you’re still living. It makes the transfer of property smoother after one dies.
How Does a Living Revocable Trust Help to Avoid Probate?
The goal is to avoid probate when it comes to estate planning. As utilizing probate court to draft up your trust documents can be quite an arduous process. And even more so when it comes time for your loved ones to make claim to ownership of your trust.
To begin with, a revocable living trust, as compared to will, is a much faster way of transferring one’s property after death. Moreover, it helps in retaining the element of privacy and happens to be probate-free, unlike a will.
While there is no denying that a living trust does not stand as a substitute for a will in its entirety, it is still a much more efficient way to transfer large-ticket property items, such as a house, in the situation of an untimely demise.
How Much Does it Cost to Set Up a Living Trust?
Well, let’s assume you have fully decided that you want to go for a revocable living trust. Now, how much are you expecting to pay? Take a wild guess!
Let’s suppose that if you are considering doing it yourself, you will need a book that will cost you around $30, or $80 for living trust software.
However, if you are thinking of hiring a professional, such as a lawyer, to get the job done, you can expect to pull up your boot straps and brace yourself to pay between $1,300 and $2,000.
It is natural to assume that paying $1,300 or more for an expert hand means you will, for sure, receive good value. But, it is not as complex as it may seem.
It really is a matter of patience and paperwork. If you don’t mind putting in a couple of hours of your time and using top-quality DIY resources, you can end up with just as effective a result as you would if a lawyer did it for you. In addition, most states offer their own version of a living revocable trust that you can download from the state website. Once completed, you can take the document to your local notary for completion.
Below is our living revocable checklist. This will help you to make sure that you have what you need to start off with the paperwork.
1. List all the assets
In order to have a full picture of your estate, make a list of all of your assets. This includes the house, car, jewelry, in addition to stocks, bonds, and even life insurance policies. If you have cryptocurrency assets be sure to leave specific and detailed instructions on how you would prefer your loved ones to access your accounts. It is best not to include any private keys or passphrases within your general Living Revocable Trust. However, you should notate instructions for access. Of course you should always consult a lawyer regarding the best preparation of any highly sensitive data concerning your assets.
While a trust does not require you to include all your property, it is best to include your most important and valuable assets and possessions. You can start with a general list, and narrow down the final property and assets that you would like to include in the final document.
2. Choose beneficiaries
Include the name, social security numbers (when available), and birthdates of the those who you would want to nominate as the successor/s of the property after death. You can also list co-beneficiaries or stipulate certain percentages that you would like your assets to be divvied out by.
3. Name someone who will manage assets and property on behalf of any minor children
If a minor child is going to inherit property through the Living Trust, you must nominate someone to manage that property until they reach the legal age. Known as an executor, this person will ensure the instructions of our trust are carried out accordingly. Be sure to list a responsible, and trusted person who you believe will handle their duties in good faith.
How to Draft a Living Trust
In order to prepare a standard living revocable trust, add the following:
- First and foremost, you have to include the name of the person creating the trust, also known as the grantor or trustor. If it is your trust, then that person is you.
- Next up is the name of the trustee. A trustee is someone who manages the trust. If it happens to be your trust, then again, that is you. Yes, you read that, right. The same person who creates it can control it too.
- Now comes the name of the person who will act as trustee and will be responsible for distributing property in the trust when the grantor dies. Most people prefer their spouse, an adult child, or a close family friend. The most important thing here, is to select someone who you trust to act in your best interest and to carry out your final wishes.
- Enter the names of the people who will be at the receiving end of your property and assets as mentioned in the trust, i.e., your designated beneficiaries.
- Lastly, list the name of the person who will be responsible for managing any property left to minors.
While many young people don’t often think about estate planning, it is nonetheless still an integral part of money management. It is always best to be prepared for life’s unexpected variables. If you have questions while drafting your trust you should consult a probate lawyer who can answer the questions that are unique to your situation, and ensure that you have prepared your documents accordingly.