As many of us enter the middle stages of life, we start thinking more seriously about our financial future and the legacy we want to leave behind. This is where a living trust can come in. Whether you’re planning for retirement, considering your children’s future or simply want to ensure your assets are managed well, creating a living trust can be a wise decision.
What is a living trust?
A living trust is a legal document that places all your assets into a trust during your lifetime. These assets can include your home, bank accounts and investments. You can manage your living trust as the trustee, and upon your passing, your beneficiaries will receive your assets without the need for probate.
Three things to consider when starting a living trust
- Timing and life changes: Major life changes, like the birth of a child or purchasing a home, can be ideal times to consider setting up a living trust. These milestones prompt us to think about the future and security of our loved ones. In other words, they help us create a clear vision of the future we want for ourselves and our families.
- Choosing a trustee: While you are the trustee of your trust while you’re still alive, you must pick the right trustee who will honor your wishes once you pass. Think of someone you trust and should be capable of handling the job.
- Understanding the costs: Setting up a living trust will not be free. You need to be aware and weigh the costs against the benefits.
So, when is the best time to create a living trust? The answer is when you’re ready. As long as you have a vision for the future and a trusted trustee and weigh the pros and cons of its costs, you can start setting up a living trust.
