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Steps to Setting Up a Family Trust

| Oct 21, 2020 | trusts

steps to setting up family trust

Family trusts can be a handy estate planning tool. A family trust is one specific type of trust that families may use to preserve their financial legacy for many years down the road. This type of trust may be beneficial for you, even if you do not have a large estate.

Family Trust Attorneys in California

If you need assistance setting-up a family trust, the attorneys at Galanti and Copenhaver can help. Our attorneys have many years of experience handling different aspects of estate planning for our clients—from the initial planning process to litigation over estate-related matters. We can help you determine whether a family trust is a good fit for your estate planning needs. Contact our office today to schedule a consultation to learn more about how we can help you.

Step One: Decide Whether or Not a Family Trust is the Right Fit for Your Estate Plans

There are many benefits to including a family trust in your estate plans; however, it is not necessary for everyone. The first step in creating a family trust is speaking with a trusted estate planning attorney, who can help you decide if it is right for you. There are different trust options for estate planning, so even if you decide a family trust is not right for you, there may be better trust options to consider.

Step Two: Choose Who You Would Like to Serve as the Trustee of Your Family Trust

Once you have decided that a family trust is right for you, the next step is to choose a trustee for the trust. You can choose nearly anyone you want to serve as the trustee. Keep in mind that the trustee will be responsible for the management of the trust, so be sure to choose someone you believe is trustworthy and able to handle that responsibility.

In many cases, it is actually a good idea to choose a third-party trustee who is outside of the family. Estate issues can become contentious within a family, so it may be helpful to choose a neutral trustee who can resist and even help to resolve trust and estate-related issues within the family.

Step Three: Choose the Beneficiaries of Your Family Trust

The third step is to choose the beneficiaries of your family trust. You can choose any family members to benefit from the trust. You will also get to decide exactly what benefit they receive from the trust.

Step Four: Create the Family Trust Agreement

Once you have decided on a trustee and the beneficiaries, the next step is to formally create the family trust agreement. While there are programs online that can assist you in making one, it is a much better idea to have the agreement drawn up by an estate planning attorney. Your attorney will be able to ensure that the trust agreement is valid and that it effectively accomplishes your financial goals.

Step Five: Fund Your Family Trust

After the trust agreement document has been created, the next thing to do is fund it. To fund the trust, you will need to transfer the assets to the trustee for ownership. This means that if you want to include a home in the family trust, you will need to transfer the deed to the home to the trustee.

The family trust can include many different assets and property. Some examples of things you can include in your family trust are real estate, collectibles, family heirlooms, sentimental items, vehicles, and art. You can also include stocks, bank accounts, and other financial investments.

Benefits of Creating a Family Trust

Family trusts are typically created in order to allow the grantor’s family members to financially benefit from the trust long-term. The grantor of the trust is the creator of the trust.

One of the major benefits of creating a family trust is that, if it is done correctly, the trust assets will be distributed to the family member beneficiaries without having to go to probate court to resolve the matter. Probate court can be a lengthy process and may also be expensive and stressful. It is often beneficial for everyone to avoid this process.

Another benefit of creating a family trust is that you retain more privacy regarding the trust assets. When probate court is avoided, there is no need to make assets and other sensitive financial information public. Without probate, there will not be a public record of the distribution of your assets.

Family trusts are a useful form of estate planning for many families. Contact our office today at 707-867-0787 or fill out our online contact form to learn more about whether a family trust is right for you.

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