If you want your assets to go to certain individuals once you are gone, one way to do to this is to set up a will and trust. The will explicitly states your wishes, while the trust passes your assets to the intended beneficiaries. Having these items in place helps your assets bypass probate so that more money stays in the pockets of your heirs. When you set up a trust, you designate a trustee for the account. The trustee is responsible for managing and disbursing the funds. While you can, take a moment to do these three things to help your trustee better manage the trust.
1. Go Over the Terms of the Trust
It is a situation that happens time and time again: language in a will or trust document is not clear, causing all parties involved to become immersed in a massive disagreement. Prevent such an instance from happening by going over the terms of the trust with your trustee. In addition to going over your will and trust document, have the trustee scan your documents to see if there are any questions.
Have your lawyer present during this conversation so that another party can verify your wishes.
2. Arm the Trustee with Extra Knowledge
Managing a trust is a huge job; the trustee may need to make decisions that pertain to a variety of financial matters, such as handling tax obligations or making investment decisions. Ensure that the trustee has the knowledge to make an informed decision by allocating money for the trustee to pay for advice from qualified professionals, such as a financial planner or certified public accountant (CPA).
Since these expenses benefit the beneficiaries of the trust, they should be paid for by the trust.
3. Learn What Kind of Accounts Should be Used in Conjunction with the Trust
In order to best keep track of the money in the trust, your trustee may need to use several types of accounts.
For example, a checking account should be opened in the name of the trust. The checking account provides the trustee with a simple way to pay bills associated with the trust. Regular bank statements also provide a written record of what expenses the trust has incurred.
A savings account or money market account may also be required. If the trustee has to keep large sums of money easily accessible, both of these accounts help the trustee do this, while providing a higher rate of interest than a checking account.
Share13 October 2016
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