A living trust is often created so a person can benefit from their assets during the course of his or her lifetime. The trustor is the creator of the trust, and can either be their own trustee or appoint another person to manage the assets. A person who has appointed themselves as a trustee can continue having control over assets, move things in and out of the trust, and manage it however they prefer. Having established a living trust helps enable a timely and straightforward distribution of property after passing on.
Q: Is it required that I hire an attorney to create a living trust?
A: While it isn’t necessary that you consult with an estate attorney Cherry Hill, NJ trusts as you write your living trust, it is highly recommended that you do so. The reason for this, is because without legal guidance an error or oversight may be made that results in the document not being llegally binding It is important to the reliability of your living trust that you have an attorney look it over and make suggestions before finalizing the document.
Q: Can I give my beneficiary a loan from the living trust?
A: Yes, if your instructions within the living trust state that such loans are permitted, then you can make a loan to your beneficiary. The beneficiary will pay you back with interest, and can use money that would have been received from the trust to alleviate this debt. Before providing a loan, consider talking with an attorney for help creating an official trust-loan contract.
Q: If I establish a living trust, do I need to write a will too?
A: Yes, a will can be helpful for handling property that was left out of the living trust. Any property that was not officially transferred into the trust, can be listed in the will instead. Property that was accumulated or purchased after the living trust was written, can be distributed based on directions in the will (unless you decide to transfer this new property to the living trust instead). A will also permits you to name a guardian for minor children and other types of property aside from real estate, such as vehicles and bank accounts.
Q: Once property is transferred into the trust, can it be taken out?
A: Yes, a person who has an individual trust, can transfer their property in and out whenever they prefer, as permission from others is not required before doing so. The only exception would be if the trust is shared, so co-trustee’s may have to provide consent before the jointly owned property can be moved.
Q: Under what circumstances should I update my living trust?
A: As life changes, living trusts can be changed to reflect new circumstances. You may want to consider updating your living trust if you get married or divorced, have adopted or had a child, moved to another state, had a significant change in financial status, a beneficiary or trustee has passed away, or a trustee has become incapacitated.
Thank you to our friends and contributors at Klenk Law for their insight into estate planning and living trusts.