One reason for creating a living trust is so your family can avoid probate court after your death. Not only is probate court time-consuming, but it gives the state of Maryland control over the distribution of your assets. To maintain control over asset distribution, a living trust is worth considering.
What a living trust is
A living trust allows you to transfer assets into a trust you create during estate planning. The trust lays out instructions for the distribution of your assets to your beneficiaries.
Revocable vs. irrevocable trusts
You can create a revocable living trust or an irrevocable living trust. If you want a trust you can change, you’ll likely choose a revocable trust. But an irrevocable trust is permanent, and you can’t make any changes once it’s finalized. There are also a few basic steps to follow.
Pick your assets
It’s your choice which assets to include in the trust. You might want to add real estate, bank accounts, savings accounts and other assets that you own. It helps to take note of all your assets so that you don’t overlook anything.
Appoint a trustee
You’ll need a trustee to manage the trust. You can choose an individual, trust company, financial institution, law firm or financial advisor to handle your trust. Just make sure that the trustee is someone you can count on.
Create your trust
Some people use the services of an estate planning attorney, a company that offers trust services or an online trust service. A living trust is a legally binding document, so you want to make sure the trust is set up correctly.
Fund your trust by transferring your assets over into the trust. For example, say you want to add your car. You’ll transfer ownership of the car to the trust, and update its registration and insurance information.
Once the above steps are complete, you can finalize the trust. Do this by signing the trust in front of a notary and making sure that the notary stamps the document.