Creating a living trust is one of the simplest ways to ensure a smooth transition of ownership of critical assets after your death. In fact, a trust can even give you extra protection as you age, as it can allow for the oversight of a trustee when you can no longer manage your assets or household on your own.
There are quite a few misconceptions about trusts that leave people nervous about establishing one or using specific assets to fund the trust. Some people feel particularly worried about the inclusion of their primary residence in a trust, while others worry about transferring investment funds or liquid capital into a trust.
The right language, structure and planning can allow you to enjoy all the benefits of a trust without worrying about loss of control.
Structure things so that you share or maintain control for as long as possible
Having multiple trustees can complicate a trust, but it can also make certain transitions much more straightforward. If your child or close family friend who will serve as trustee after your death is able to perform some of the tasks required of a trustee now, they will be more familiar with the process of managing the trust when you are no longer capable of doing so.
Instead of simply handing control over the trust to them when you establish it, keeping yourself or your spouse as a co-trustee will ensure that there is adequate oversight, thereby ensuring that the other trustee doesn’t violate their fiduciary duty to you or inappropriately use the assets from the trust.
You have the right to outlines how the trust handles or disburses assets
Are you worried that the creation of a trust could mean that your family forces you to sell your home instead of letting you age in place or stay at home while receiving hospice care? A trust will give you much more control and authority over your most valuable assets and the most important decisions.
You can include language in your trust that specifically prohibits the sale of your house except in certain circumstances. You can also limit the authority that the trustee has prior to your death or require the approval of multiple parties before any major transfer of assets can take place.
In other words, depending on your family’s unique circumstances, there are multiple ways for you to structure and fund a trust that will offer you optimal protection and security while also reducing tax obligations and risks as you age.