The first thing you need to understand when it comes to estate planning is that you just need to do it whether you want to or not. Then, you need to familiarize yourself with the different ways to plan and the different terms out there. One term, for example, is a living trust. Living trusts can be one way to successfully plan your estate without having to put your family through probate is a living trust.

What is a Living Trust?

Living trusts are basically trusts that are created while an individual is alive as opposed to ones that are created by the will. There are multiple types of trust, and some of them can avoid probate. The two main types are a basic living trust, a trust that does avoid probate, and an AB trust that avoids probate and saves on estate tax. This trust allows property to be passed to the beneficiaries without probate.

How Do I Create a Living Trust?

In order to make a living trust, a declaration of trust must be created. You, the individual, is named as trustee, or the person that is responsible for the property. Then, ownership of the property is transferred to yourself. Control of the property is still yours; it is just transferred from yourself to yourself. You name the person that you want to inherit the trust property after death.

After death, that person who you named in the “trust document” takes over. He or she is known as the successor trustee and now controls the distribution of the property. In some cases, someone creating a living trust does not need a lawyer. Simple estates may only need an estate planning book or software.

Trusting the Trust

The AARP warns estate planners that some living trusts care scams. They urge people to avoid salespersons that promote living trusts and harass aggressively. Some of these scammers even claim that they are being endorsed by AARP, which the organization insists may not be true. Investigation into the validity of a living trust organization is imperative before purchasing to avoid being had.