A living trust may seem confusing, but thankfully some lawyers are there to answer your every question. Because it involves your assets in the event of your death, you need to ensure you know every detail for your trust. Here are eight questions you need to ask your trust lawyer before signing anything.
What is an AB trust?
There are different types of trusts including an AB trust, revocable, and irrevocable trust. An AB trust is created by a married couple with the objective of minimizing estate taxes due to double-taxation.
Can a trust be contested?
Yes, a trust can be challenged just like a will. If for any reason the trust maker was mentally incompetent, forced, unduly influenced, or deceived when setting up the trust, then the contest can be successful.
Can a trust override a will?
There are certain situations when a trust can override a will. This is usually in the case of an irrevocable living trust. If you give your house to the irrevocable trust, you give up your ownership of the home, meaning you cannot give it to someone in your will.
What can go into a trust?
Most assets can be placed in your trust with the exclusion of things like life insurance and certain retirement accounts. Things that can go into a trust include real estate, stocks, bonds, patents, copyrights, works of art, precious metals, collections, and much more. If you have a specific question, ask your attorney if it can go into a trust.
Who should be my trustee?
The trustee is who manages and protects any assets, and it can be anyone you choose. While you can name yourself as a trustee, it’s also important to name a secondary trustee to handle affairs once you pass. You can even choose a corporation as your trustee if you prefer.
Do I need a power of attorney?
Living trusts control all of your assets if you become incapacitated, but many attorneys still suggest that you draw up a power of attorney to make financial and medical decisions on your behalf. The power of attorney protects you as an individual whereas a living trust controls where your assets go when you pass.
How do I create a living trust?
While an attorney can create a living trust, you also have the ability to make it yourself. Some websites like Nolo and LegalZoom allow you to create a living trust without the assistance of an attorney. You simply fill out necessary fields and follow the steps listed on the software.
Should I have a will as well?
In the end, it’s up to you whether you should create a will. It depends on your situation. Many attorneys suggest that you should still create a will as insurance that your trust is followed or in the situation that certain assets are left out of your trust. The will directs that the property be placed in a trust. A will is especially useful if you created an irrevocable living trust.