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by A.W. Berry

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A living trust is a legal document that serves several purposes in the event of death of the primary trustee and concerns the assets of that person. Living trusts may be revocable or irrevocable, and each type has different legal protections, and functions. Depending on where the living trust is created, the effectiveness and creation of the document may have different requirements. This article will discuss the creation of living trusts in terms of its purpose, process and type.

HOW TO CREATE A LIVING TRUST:

A living trust must be created in accordance with State law and therefore is ideally created by a lawyer licensed to practice law in that State. There are online legal services that allow state trusts to be customized online, one such example being lawyers.com. that offer 1 free legal document to first time users and/or within the free trial period of 30 days. There are several considerations and elements within a living trust that should be included in the document and defined before its creation.

STEP 1: DEFINE THE PURPOSE OF THE LIVING TRUST

There are many purposes for living trusts, therefore defining the purpose will aid in choosing the correct type of trust for that purpose. For example, in a generational skipping trust, assets are passed onto grandchildren rather than children in the event of death of the grantor or primary trustee. A more complete list if trusts can be found at livingtrustnetwork.com.

STEP 2: LOCATE A RELIABLE LIVING TRUST CREATOR

Since living trusts can be complex especially in the case of large estates that will be divided in several ways, consulting a licensed trust attorney in one's state of permanent residence can be helpful. When choosing a source for the living trust be sure to ascertain the validity of the living trust by confirming the following details:

*State(s) of effectiveness
*Compliance with State laws and/or regulation
*Appropriateness of trust to individual and/or family goals
*Proper terminology and listing of beneficiary, trustees and assets

STEP 3: WRITE THE TRUST

When the living trust is written it will include several items and will likely need to be notarized to become effective. Notarization may be performed by a licensed notary within an attorney's office or independently at an external licensed notary such as a bank notary. Some typical elements included in a trust are listed below.

*Type of trust i.e. revocable or irrevocable
*Sub-type of trust i.e. A/B trust
*Primary trustee/Grantor's name

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