Most of our clients are normal people with a nest egg like equity in their house and some retirement account investments. They have been working hard their whole lives but aren’t like the millionaires you see on TV. The vast majority of our clients choose to create a revocable living trust once they understand their benefits. What many people are less clear about is, where are trusts kept?
What is a revocable living trust?
First, what is a revocable living trust? A trust is basically a contract, about 20-30 pages long, that you create as the “Settlor” (or may also be known as a “Grantor” or “Trustor,” these words mean the same thing) The contract is revocable, meaning you can change it any time you want when you are the Settlor. The contract is a “living trust” meaning that you can only change it while you are alive. You, the Trust creator (the Settlor) are also usually the Trustee (as long as you are good with being in charge of your own assets still). You use all your assets just like normal, only, they will happen to be in your trust. The reason your assets are in your trust is to avoid probate so that it is easier for your loved ones (your beneficiaries) to receive your assets without any government interference, namely, probate.
How do you put stuff in your revocable living trust?
In order to make sure that your assets are part of this trust, there are three options:
- Retitle the asset in the name of your trust. For example, when our clients own real estate, we create a deed moving the house from the client’s name to the client’s trust.
- Designate a beneficiary. For example, you can designate your trust as the beneficiary of an account. There can be some very important tax consequences, so don’t try to do this yourself without getting guidance from a professional.
What is included in a living trust?
The documents for a living trust typically include a number of pieces:
- Trust Agreement: This foundational document outlines the terms, conditions, and instructions for managing and distributing trust assets. It specifies the role of the trustee, beneficiaries, and any specific conditions for asset distribution.
- Asset Documentation: Records of the assets transferred into the trust, such as property deeds, financial account statements, and other ownership documents.
- Amendments: If changes are made to the trust terms after its creation, amendments reflect these updates.
- Instructions for Distribution: If the trust includes specific instructions for asset distribution, these details are documented to ensure they are followed accurately.
- Designations and Appointments: Any appointments of successor trustees or beneficiaries are documented to maintain clarity.
Physical Storage: Home Safes and Safety Deposit Boxes
Now, where do you physically keep these documents? Trust documents can be physically stored in a secure location, such as a home safe or a safety deposit box at a bank. These options provide protection against damage, loss, or unauthorized access. However, it’s important to consider accessibility and to inform your chosen representatives about the location and access details.
Our trust estate plans also include a flash drive with an electronic copy of your estate plan on it in PDF form. You can store your trust on the cloud or in whatever electronic format you would like.
Legal Professionals: Trusted Custodians
Working with an attorney or legal professional who specializes in estate planning can be a wise choice. They often offer trust administration services and can serve as trusted custodians of your trust documents. This ensures that your documents are professionally managed and accessible when needed.
When it comes to the question, “Where are trusts kept?” the answer revolves around ensuring the safety, accessibility, and proper management of trust documents. Whether you choose physical storage, digital solutions, or entrust a legal professional, the key is to have a secure plan in place that aligns with your preferences and needs. If you’re uncertain about the best approach for safekeeping your trust documents, consulting an estate planning expert can provide valuable guidance and peace of mind.
Remember, the safekeeping of trust documents is an essential component of a well-executed estate plan, ensuring that your wishes are upheld and your beneficiaries are taken care of according to your intentions. Please feel free to reach out to us if we can help.