How a Living Trust can be Set Up
It’s quite understandable if some people are confused as to what constitute a living trust. A living trust, in fact, is just one of the many types of trusts that are in existence today. The definition of each type depends on the intention or the reason why it is created. In addition, one type of trust may be combined with another, making it even more confusing for some people.
Trusts can be set up during the life of a settlor, or after his death through his will. A last will, as a side note, is different from a living will, a concept that is also confusing for some people. There are four ways to create a trust. One way is through a will, as mentioned earlier. It’s known as a testamentary trust. It can also be created through oral declaration. A court can order a trust be created in some family proceedings. In the case of a living trust, it is created through a written trust instrument signed by both the settlor and the trustees. Online companies that offer services such as filing documents for divorce online, drafting living will documents, and other similar services, can also help you with drafting a written trust instrument.
Because it’s a legal document, a living trust must be certain and not ambiguous in what are contained in the document. There must be a clear intent on why the trust is created. The properties or assets that will be included in the trust must be clearly identified. Often, assets like real property, stock shares, and cash are the subject matter of the trust. The beneficiaries of the trust must also be clearly identified. Future beneficiaries that are not born yet can be included, as long as they are clearly states, like indicating “future grandchildren”.
With these things in mind, assess if the lawyer or the company you’ll hire to help you set up the trust know for certain how trusts should be made.
Trusts can be set up during the life of a settlor, or after his death through his will. A last will, as a side note, is different from a living will, a concept that is also confusing for some people. There are four ways to create a trust. One way is through a will, as mentioned earlier. It’s known as a testamentary trust. It can also be created through oral declaration. A court can order a trust be created in some family proceedings. In the case of a living trust, it is created through a written trust instrument signed by both the settlor and the trustees. Online companies that offer services such as filing documents for divorce online, drafting living will documents, and other similar services, can also help you with drafting a written trust instrument.
Because it’s a legal document, a living trust must be certain and not ambiguous in what are contained in the document. There must be a clear intent on why the trust is created. The properties or assets that will be included in the trust must be clearly identified. Often, assets like real property, stock shares, and cash are the subject matter of the trust. The beneficiaries of the trust must also be clearly identified. Future beneficiaries that are not born yet can be included, as long as they are clearly states, like indicating “future grandchildren”.
With these things in mind, assess if the lawyer or the company you’ll hire to help you set up the trust know for certain how trusts should be made.
