In Texas, creating a living trust as part of your estate plan can simplify your financial matters after your passing, easing some of the burden for your family and loved ones. A living trust also provides peace of mind that the trustee will fulfill your wishes. Setting up a trust requires that you understand the steps and an explanation of each follows.
Choose your trust
Trusts come with many optional features, depending on your desired goals. You can set up a trust, whether single or married; even if married, you can still set up separate trusts for each spouse. You can also have instructions for your trust, such as distributing its assets to a beneficiary on a set schedule to avoid squandering an inheritance, putting assets aside for a special needs child’s care after you are gone and many other purposes.
Identify which assets go into the trust
Inventory your property and other assets, then identify what you want to place in your trust. You can transfer stocks, bonds, real estate, bank accounts, vehicles, and family heirlooms. You do not need to transfer life insurance or retirement accounts into a trust because you designate their beneficiaries separately when setting up those accounts.
The trustee and asset distribution
Designate yourself or someone else to manage your assets as the trustee. If you appoint yourself, you must designate a successor trustee to take over the trust upon your passing. Next, determine how you would like your property to be distributed to your heirs if you have more than one beneficiary.
Draft the document
Once you have made your decisions, create a trust document to formalize the estate planning information. You can use an online service with a trust document template or work with a service provider who can prepare the document on your behalf.
When you finish drafting the trust document, you must sign it and have the paperwork notarized so that it has legal validity.
Funding the trust
Each asset you want to transfer into your trust requires specific paperwork. For real estate, you must transfer ownership to the trust with a deed or title document. For bank accounts, you need to work with the banking or financial institution holding your assets to complete the necessary transfer forms.
Using a living trust for your estate can help avoid probate, help your family receive your assets sooner and potentially reduce costs. Living trusts offer advantages to larger and smaller estates and can ensure that your final wishes are carried out as intended.
