Four Things You Need to Know About Using a Living Trust
You may also have heard that a living trust is referred to as a revocable trust. This means that you are eligible to update it or cancel it over the course of your life.
As the name suggests, your living trust is effective over the course of your lifetime, meaning that you can also transfer assets into it to protect you even when you are incapacitated. There are four critical things you should keep in mind as you put together a living trust.
These include:
- Make use of power of attorney documents such as a financial power of attorney or a healthcare power of attorney to appoint someone else to make decisions on your behalf if you are unable to do so.
- Transfer all probate type assets into this trust using a letter of instructions. Legal guidance should be used for any complex property moving into the trust.
- Consider using a pour-over will. The only way to avoid probate is to ensure that the property is inside the living trust when you pass away. A pour-over will can assist with this process.
- Select the right trustee. You could name an individual or a corporate trustee to serve in this role.
A living trust can be used to help many different estate planning situations, and working with your lawyer regularly to ensure that all your estate planning strategies are in line with your needs is important. Consulting with an experienced estate planning attorney in Virginia is strongly recommended if you intend to use living trusts as part of your process.
