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5 Important Steps to Take Before You Set Up a Living Trust

August 30, 2017 by Greg Port, J.D., M.B.A.


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People who are aware of the benefits of a living trust might be tempted to rush into forming one without taking a few simple, preliminary steps that will make the process much easier. A well-written and planned out living trust can help you to avoid having your assets go through a public probate process and allow you and your family to maintain some privacy and confidentiality with respect to those assets.

Unlike a will that is intended to direct the distribution of your assets after you pass away, a living trust can help you to manage those assets before your death in the event that you are incapacitated or disabled.

You do not need a large estate or significant amounts of assets to benefit from a living trust, but you will best be able to realize those benefits if you give some thought and attention to these five important steps before you set up the trust.

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1. Create a written inventory of all of your assets.

Even if you have a good handle on your assets, creating a written inventory of those assets can jog your memory about items like life insurance policies and old savings bonds that you might not pay much attention to during your regular daily activities.

If you omit assets from this inventory, you take the risk of having those assets pass to an heir through a residual pour over will. Knowing the full scope of what you have is the first step in the preparation and planning of every living trust.

2. Gather all documentation that shows ownership of your assets.

You might have a good idea of where the title to your car and the deed to your house are, but you might also be at a loss to locate life insurance policies, stock certificate or electronic records of stock holdings, and banking statements.

You should keep all of that documentation in a secure location, such as a fireproof safe or a safety deposit box, and instruct your attorney and other trusted parties as to the location of that documentation.

Once you begin the process of setting up a trust with your estate-planning attorney, you should make all of these documents available to them.

3. Identify your beneficiaries.

More critically, confirm that your naming of beneficiaries in your living trust documentation is consistent with individuals who are joint owners on titles, deeds, life insurance policies, and bank accounts.

Address any inconsistencies before you establish the living trust and alert your attorney of potential conflicts that you might foresee among beneficiaries.

It is important to document these potential conflicts beforehand, so that they may be planned for and dealt with appropriately.

4. Choose a successor trustee.

You will generally name yourself and your spouse as the co-trustees of your living trust, but you will also need to identify another person to handle trustee duties when the second of you either pass away or are incapacitated.

Children and close relatives are obvious choices as successor trustees, but if they are also named as beneficiaries of your trust, they might encounter emotional conflicts if they also act as a successor trustee. Consider naming an attorney or some other independent advisor as your successor trustee.

5. Choose a guardian for your minor children and any special needs children in your family.

You will not designate the guardian in the trust document, but you should select a guardian for minor and/or special needs children and ask that person if he or she will consent to be their guardian in the event of your death or incapacity.

Keep in mind that, after you set it up, you should periodically revisit your living trust documentation to amend it to include assets that you acquire after the trust is established.

You can also handle those assets with a pour-over provision in your will, but if you take the time to set up a living trust, you should devote additional time to good management of that trust as well.

Port Legal understands the challenges and difficulties that individuals encounter when they make their estate plans. For us, creating those plans is more than just directing the distribution of assets. It’s our mission to take the time to understand your and your family's needs and desires.

We establish estate plans and living trust documents that carry your wishes well into the future. Contact us for a free consultation. We’ll give you more information on how to establish a sound and effective estate plan and living trust for you. 

Our consultations are completely free of charge and intended to equip you to make the best decision.


Topics: Estate Planning, Wills, Last Will & Testament

Greg Port, J.D., M.B.A.

Written by Greg Port, J.D., M.B.A.

Port Legal founding attorney, Gregory Port has over 30 years experience. He has provided strategic corporate law representation in Central Ohio to clients since 1990. Gregory Port is a lawyer actively practicing in the areas of probate, estate planning, and real estate. His experience and core values are the cornerstones of Port Legal as a specialized advocate for your interests.