Do You Need a Trust Account or Revocable Living Trust?
You’ve worked hard for your family and assets. As you look to the future, you may be considering the best way to care for yourself, your property, and your loved ones.
You may wish to prepare for a time when you are no longer able to manage your estate. Maybe you are a parent or grandparent, and you want to make sure that your assets are divided in a fair, productive way. Someone may have advised you to create a trust, leaving you wondering what that entails.
By transferring your assets into a trust, you can determine how they will be distributed after your passing. It also allows you to appoint a trusted individual who will manage your property in the event that you cannot.
Additionally, a trust or trust fund allows you to:
- designate how certain beneficiaries may use certain assets (e.g., for education, for healthcare)
- designate when a beneficiaries may access certain assets (e.g., when turning 18, every 5 years)
- help your beneficiaries avoid the lengthy and costly probate process (or, the process of determining that a will is valid)
- make plans for jointly owned property and accounts
- with the help of an attorney, include clauses to reduce taxes
An estate attorney can help you take steps to protect and fully enjoy your assets. To schedule a complimentary consultation with estate lawyer Ben T. Roberds, call (479) 464-0904.
Preparing a Trust Account
With a trust account, you can assure that your property is used responsibly and according to your wishes.
The first step when preparing a trust account is to determine how much you wish to pay into the trust. You can place all of your assets in a trust, or just a few investments, particular funds, or some pieces of land. This is entirely up to you—one dollar is the minimum requirement.
Next, you will appoint trustees who will be given control of any and all assets you put into the trust. Most often, individuals appoint spouses as co-trustees, though a trustee can be any mentally competent person over the age of 18.
You may also decide to appoint successor trustees to manage the trust if or when the initial trustees are no longer able. It’s common to name children or other trusted heirs as successor trustees, or you might choose to name a professional fiduciary.
Finally, you will appoint beneficiaries, who will receive ownership of your property after your death.
What is the Difference Between a Trust Account and a Living Trust?
By appointing yourself as a trustee, you can maintain control over your estate while you are still living. With a living trust, you can also protect your assets in the event that you are unable to manage your estate on your own. Your appointed co-trustee will take the reins.
If you create a living revocable trust, you can cancel it at any time, as long as you are in sound mind. You can add or subtract property and accounts as needed. You do not need to consult a lawyer to make these adjustments, though you may wish to consult with your estate attorney.
Do You Need a Will or a Trust?
More commonly known than trusts, a will is the official document with which an individual specifies how to divide their estate after passing.
Unlike a will, however, a trust account can facilitate the distribution of your assets without probate. A trust is also private—what you decide will not become public record. Both of these distinctions can save your loved ones from pain and hassle.
However, a trust is not right for everyone. If you have a simple, straightforward estate, making a will might be more cost effective and efficient. If you wish, you can choose to create a will and a trust.
A qualified will and trust attorney can help you determine the right decision for you, your family, and your estate.
What About Power of Attorney?
With a power of attorney, you can grant trusted individuals the authority to make financial or medical decisions on your behalf.
If worded properly, a living trust can sometimes stand in for a financial power of attorney. However, it does not grant a loved one authority over your medical care.
If you wish to create a trust that can serve as a financial power of attorney, it’s very important to work with an experienced estate attorney.
Arkansas Estate Planning Attorney Ben T. Roberds
If you are unsure how to make the best plan for your estate, or if you wish to learn more about trust accounts and living trusts, call attorney Ben T. Roberds for a complimentary consultation. (479) 464-0904