We hear that living trusts are hot these days, even when people don’t quite know what they are.
“People often come into my office and say, ‘I want one,’” says elder law attorney Ronald Fatoullah. “I’ll ask them ‘Do you know what a living trust is,’ and they’ll say ‘I don’t know, but a friend of mine has one and I want one too.’”
A living trust is a way to financially protect loved ones after you’ve passed on. It is a receptacle for all of your assets including rental property, bank accounts, stocks, bonds or your home.
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Through the trust, you can determine which of your assets goes to whom, and when, without having to go through probate, or the legal process of resolving a claim against your will. The trust is set up as a legal entity similar to a corporation and you have the power to decide who will administer your assets.
How to Get Started
If you want to put money aside for the next generation in a living trust, here are a few tips:
1. Talk to your family about your plans. It may be too early to tell a spendthrift child that they’re not getting the house, but that the trust is getting it. Tell them that you’re looking at ways to provide for them after you die and be open to their input.
2. Find a good lawyer. Building your living trust will take more than a pen and paper. According to John R. Bennett, head of Bennett Trust Estate & Elderlaw in Valdosta, Ga., it is important for people to find an attorney who takes what he calls a “counseling-oriented” approach to estate planning, rather than someone who just prints out a bunch of forms for you to sign.
One good place to start your attorney search is the National Academy of Elder Law Attorneys.
