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3 Helpful Tips When Creating A Trust

by Jamie Nichols

One of the best ways you can protect your assets and your family is to establish a trust. This legal document involves a lot of steps, and in order to get through this process you'll want to consider these helpful tips.

Know Why You Need One

Since this process is pretty detailed, you should understand if you even need a trust in the first place. Typically, trusts are reserved for those who want their assets ending up in the right hands after they pass on. Trusts are a good way to disperse money over time to a certain individual, as opposed to giving them just one lump sum to spend frivolously.

Trusts also prevent your information from becoming public record during probate. This is important if you don't want people -- to whom you may not have spoken in a long time -- coming out of the woodwork to claim your assets. Lastly, your beneficiaries won't have to pay any taxes on the assets they receive from a trust. 

Identify the Trustee and Beneficiaries 

Perhaps one of the most difficult aspects of creating a trust is identifying the beneficiaries, or the people that receive your assets. If you need some help, think about what life would be like for your family after you're gone. Who would benefit the most as a beneficiary? This line of thinking can help you narrow down your choices, whether it's your daughter or spouse or another family member.

Once you've identified a beneficiary, you need to select a trustee; this is the person who carries out your wishes. Make sure they are trustworthy; you may even want to consider using a corporate trustee company or private fiduciary. 

Hire an Attorney 

You've probably never dealt with trusts before, and as such, the terminology and systems may seem foreign. You can rest assured your trust is created correctly and quickly by hiring an experienced attorney.

This legal professional can assist you in many different ways, from consulting with you about the ideal beneficiary to filling out the necessary paperwork. They'll make sure your trust is legally binding and executed correctly. These professionals can also update your trust over the years, making necessary changes based on your requests.

Creating a trust is one of the most important actions you can take, not only for your finances, but for your family's well being. This process doesn't have to be stressful, either, if you follow the correct protocol and seek legal counsel when appropriate. Contact legal professionals like Kelm & Reuter, P.A. for more information.