A living trust is one legal arrangement you can’t afford to make any mistake while setting up. The reason is that once the validity of a trust is refuted, your loved ones will have no option but to go through the lengthy and emotionally draining probate process you tried to avoid. Many people are unaware of this, but that is the bitter truth about how a living trust works. If you’re planning to create a living trust in the UK, below are five steps you can follow:
1. Consult an expert
Although it sounds simple, creating a living trust can be more complicated than writing a will. That is why we recommend speaking with experts before initiating the process. For your trust to be valid, it must contain the right terms and be properly drafted.
After reviewing your needs, the living trust expert will advise which trust arrangement will work best for you. So, seek the guidance of a solicitor or estate planning attorney who specializes in living trusts. They will help you draft a legally sound trust document.
2. Fund the trust
After creating the perfect living trust with the right terms, the next step is to transfer your assets into the trust’s name. This process may involve changing property titles, updating account registrations, and reassigning ownership of other assets. Your trust can only protect the assets you move to it. If you miss this step, your loved ones will go through the probate process you tried to shield them from.
3. Appoint trustees
You can appoint trusted persons to manage your trust or do it yourself while alive. Suppose you choose to manage the trust yourself. It is still good to appoint successor trustees to ensure seamless asset management if you ever become incapacitated due to an illness or pass away.
4. Make Regular Updates
It is vital to keep your living trust updated. Review and amend the trust as needed, especially after major life events like marriage, divorce, acquisition of new assets, etc.
5. Notify Beneficiaries
Finally, ensure your beneficiaries know the living trust and its contents. This will help them to understand their roles and responsibilities when the time comes.
If you follow the five-step guide above correctly, you can be sure your assets will move to your loved ones (or other chosen beneficiaries of the trust) directly after your death. To recap, a valid living trust creation starts with consulting a living trust expert. The expert will advise you on the best trust arrangement for your needs. Afterwards, you can fund the trust and appoint a trustee. The final steps are to notify the beneficiaries and update the trust when necessary. If you still find any of these confusing or need further guidance, you can let us know, and someone from our team of experts will attend to you.