What is Living Trust Drafting?
A living trust specifies how your assets will be distributed between your beneficiaries when you pass away. It assigns a trustee to manage the assets and can help you to avoid probate.
If you need to draft a living trust, you might wonder what’s required. Read the rest of this article for clarity about the key terms you’ll need to include in a living trust document, how to navigate the drafting process, and how a qualified lawyer can assist you.
What are Key Terms to Include in a Living Trust?
A living trust usually contains the following terms:
- Parties. The trustor, trustee, and beneficiaries must be listed accurately to prevent issues.
- Revocable or irrevocable trust. Specifying if the living trust can be changed or not is important.
- Principal or corpus. List the assets that are transferred to the trust.
- Funding. Specify the process of transferring assets into the trust.
- Discretionary distribution. If this is included, it specifies a distribution the trustee has the discretion to make.
- Trust administration. This provides clarity about how the trust is managed, such as regarding investing the assets into the trust and paying expenses.
What are Tips for Drafting a Living Trust?
While a living trust can seem pretty straightforward, there are some important things to consider when drafting it so that you don’t make any costly errors.
Consider the Assets
Not all assets can be placed in a living trust, such as retirement or medical savings. It’s important to research what can and can’t be transferred into the trust so that you don’t risk transfer failure.
Specify Trustee Obligations
The living trust agreement should specify exactly what the assigned trustee will do, such as if they need to maintain real estate property or pay certain expenses. Be as clear and specific as possible to prevent ambiguity.
Refer to the Governing Law
Make your living trust legally compliant and enforceable by checking what state laws govern it. Bear in mind that the rules for living trusts can vary quite a bit in different states. If you need assistance with this aspect of the drafting process, you should consult a qualified lawyer.
Provide Alternatives
Make sure that the document clearly names the trustee. Include alternative people who can take over should the original trustee be incapable of completing their duties.
Fund the Trust Correctly
Title your assets in the name of the trust so that they are correctly transferred. Make sure that you use specific language when explaining exactly what you want to happen with your assets in the trust, avoiding anything vague that can be open to misinterpretation.
Explain if the Trust is Revocable
It’s important to state if the grantor can change or revoke the trust. If so, make sure that you clearly define who has the power to make amendments.
Detail all Distributions
The living trust must clearly define what beneficiaries will receive and when. If there are any special conditions, such as that certain assets will be held for under-age beneficiaries until they reach a certain age, these details must be included.
Do You Need a Lawyer to Draft Your Living Trust?
Hiring a lawyer to draft your living trust is advisable. You don’t want to make any mistakes that could create disputes in the future. A lawyer will consider your wishes and ensure they’re explained clearly.
A lawyer will help you by:
- Customizing the trust to your specific needs and wishes. They’ll consider your circumstances and estate-planning goals to prevent contradictions.
- Helping you to select the most appropriate trust structure. They’ll help you decide if a revocable living trust or other type of trust is best for your specific goal and situation.
- Specifying beneficiaries. They’ll include information about who will receive the assets, when they will receive them, and what happens should a beneficiary die or you change your mind about including them in the trust.
- Planning for incapacity. A lawyer is skilled at considering future events. They’ll help you to have a solid document with clear instructions if you become unable to manage your assets.
- Funding the trust. A lawyer will ensure that assets are properly transferred into the living trust so that there are no errors.
- Aligning the living trust with state laws. Since trust and tax rules vary quite a bit in different states, a lawyer is skilled at helping you to meet all the requirements that apply to you.
Where to Find and Hire a Lawyer for Living Trust Drafting
If you need to hire a lawyer to draft your living trust, the process is easy if you use an online legal platform that connects you to reputable, experienced lawyers in your location.
ContractsCounsel is one of the largest online legal marketplaces that gives you access to a curated network of vetted lawyers. All lawyers on the platform have contract drafting and review experience, ensuring that your final agreement is clear and legally valid.
If you want to ask a lawyer on the platform to draft your living trust, here are the steps to follow:
- Visit the ContractsCounsel marketplace, where it’s free for you to post your project or request.
- Choose ‘One-time project’ and ‘Create or update contract.’
- Post a project. Include some details about what you require to help you match with the most suitable lawyers.
- Wait for bids. You’ll receive multiple bids from lawyers directly on the platform who are experienced.
- Review the lawyers. The platform provides extensive lawyer information, such as their credentials, years of experience, location, expertise, and client ratings for previous projects they’ve completed on the platform.
- Select a lawyer to work with and hire them to draft your living trust for a flat fee.
