Here’s the short answer: it doesn’t! When we hear the word “trust,” we often think it means this special thing that requires a lot of effort to maintain it, but it’s really the complete opposite. While a revocable living trust is important in ensuring that your estate plan meets your goals, it does not affect your day-to-day life.
The most work you have to do with a living trust is what we refer to as funding your trust. This is the process where we move your assets into your living trust. This process usually involves retitling accounts and executing a deed for any real estate you own. We would consider this the most important step when creating your trust.
When you retitle a bank account to a trust, you usually should not have to change account numbers because the trust operates under your own social security number. However, we have discovered that some financial institutions do require you to close your current account and open a new one, but this is not the norm. Generally, you don't even need to get a new checkbook. You go about spending money from your bank account just like you did before you established your living trust.
You retain the power over your assets to do with them as you please. If you want to donate everything to charity, you can. If you want to change your beneficiaries, you can. If you want to change from a living trust to an irrevocable trust, you can. It’s just business as usual, and if you were to ever become incapacitated and unable to continue to manage your living trust, there are directions for what to do in the event of your incapacity.
Next Steps for Setting Up a Living Trust
- Work with an experienced estate planning attorney to ensure that your living trust works as you want it to.
- Fund your trust so that you are able to take advantage of the benefits a revocable living trust can provide.
At Carolina Family Estate Planning, we walk side-by-side with our clients through the entire estate planning process, including funding for revocable living trusts. If you would like to work with one of our experienced estate planning attorneys in establishing a living trust, please contact our office at 919-443-3035 or schedule a free needs-assessment call via our website.