Setting up a will and trust can help ensure that someone manages your assets according to your wishes when you pass away. With the proper set-up, these legal instruments can save money for your loved ones. They can also protect your legacy for generations to come.
Understand Your Responsibilities as a Trustmaker.
When you set up your will and trust, you become the trustmaker. As a trustmaker, you are responsible for managing your assets during your lifetime. You are also responsible for making decisions about how the person you select will distribute those assets. It is important to understand your responsibilities when setting up the funds, including the legal obligations associated with maintaining and distributing those funds in accordance with the wishes of your beneficiaries.
Decide Which Type of Will and Trust is Best for You.
Deciding which type of will and trust is best for your particular needs is key to setting up an effective estate plan. There are general testaments, living wills, living trusts, and testamentary trusts, each with different benefits and drawbacks. Speak to an estate planning lawyer who can help you understand the nuances of each option and make sure you pick the right one for your situation.
Select a Beneficiary for Your Assets.
Once you decide which type of will and trust is best for your situation, you should select a beneficiary or beneficiaries. The beneficiaries are the people or organizations who get your assets after you die. Selecting a beneficiary for your assets ensures that the person in charge distributes those assets according to your wishes after you are gone. Make sure that whoever you choose is someone who is aware of the responsibility involved and willing to act as the executor of your will in accordance with the laws in your state.
Understand the Differences Between a Will and a Trust.
A will is a legally binding document that outlines how your personal representative should distribute your property when you die. A trust, on the other hand, is an entity through which you can manage your assets while you are still living. A trust can also specify how your things should be distributed after you pass away. With a trust, your assets are placed in the trust, and managed by a trustee who makes sure all of the details of your plan are followed. Trusts can also be beneficial in providing protection from creditors and keeping certain assets out of probate court.
Decide What to Include in Your Will or Trust.
Before you begin setting up a will or trust, it’s important to decide what you want included in the documents. This includes all of your assets, such as real estate, investments, and bank account. It also includes any personal property you wish to give away. You should also determine who you want to be the beneficiaries of your estate. Also make sure they are all listed in your will or trust. Additionally, you need to pick an executor or trustee. That person is responsible for carrying out the wishes outlined in your document.