A living trust is a versatile estate planning tool that offers numerous benefits, including avoiding probate, maintaining privacy, and providing for your loved ones. But what exactly should you include in a living trust? This blog post outlines the essential elements to consider when creating or updating your trust.

1. Identification of Key Parties:

• Grantor (Trustor): This is the person who creates the trust and transfers assets into it.
• Trustee: This person is responsible for managing the assets in the trust according to the terms of the trust document. The grantor can also serve as the trustee during their lifetime.
• Beneficiaries: These are the individuals or entities who will ultimately inherit the assets in the trust.

2. Funding the Trust:

Clearly identify the assets you intend to transfer into the trust. This can include:

• Real Estate: Your home, rental properties, or other real estate holdings.
• Financial Accounts: Bank accounts, brokerage accounts, investment portfolios.
• Personal Property: Vehicles, jewelry, artwork, collectibles.
• Life Insurance Policies: You can name the trust as the beneficiary of your life insurance policy.

3. Distribution of Assets:

Specify how and when you want your assets to be distributed to your beneficiaries. You can outline specific bequests, establish a schedule for distributions, or create a formula for dividing your assets.

4. Successor Trustee:

Name a successor trustee who will take over management of the trust in the event of your incapacity or death. Choose someone you trust and who is capable of handling financial matters.

5. Guardianship for Minor Children:

If you have minor children, designate a guardian in your trust to care for them if you and your spouse are no longer living.

6. Incapacity Provisions:

Include provisions that address what happens if you become incapacitated and are unable to manage your own affairs. This might involve a process for determining incapacity and outlining the powers of the trustee.

7. Special Needs Provisions:

If you have a beneficiary with special needs, consider including specific provisions in your trust to ensure they continue to receive necessary benefits without jeopardizing their eligibility for government assistance programs.

8. Charitable Giving:

If you plan to leave assets to charitable organizations, specify the name of the organization and the amount or percentage of your estate you wish to donate.

9. Tax Planning:

Consult with an estate planning attorney to discuss potential tax implications and incorporate strategies to minimize estate taxes.

10. No-Contest Clause:

A no-contest clause can discourage beneficiaries from challenging the terms of the trust.

11. Spendthrift Provision:

A spendthrift provision can protect beneficiaries from creditors and prevent them from recklessly spending their inheritance.

12. Powers of the Trustee:

Clearly define the powers granted to the trustee, including investment authority, distribution discretion, and the ability to hire professionals like accountants or attorneys.

13. Trust Duration:

Specify the duration of the trust. Most living trusts are designed to continue after the grantor’s death until the assets are distributed to the beneficiaries.

Creating a comprehensive living trust is a complex process. It’s essential to work with an experienced estate planning attorney to ensure your trust accurately reflects your wishes and effectively protects your loved ones. Learn more about Asset Protection, Will and Trusts. with Feliciano Financial Group, contact us today to discuss your Financial Blueprint.