This article is part of our series on setting up trusts in Oklahoma. Our last post explained that a trust is an agreement where several parties own property together. We covered the different roles played by each party. We also explained that a single party will usually hold all of the roles of a trust, at least in the beginning.
Now that you understand the different roles, you are ready to set up your trust.
Setting up a trust involves creating the trust itself. That involves naming the trustees and beneficiaries. Then there is the design phase. This means designing every part of your trust. You will pick the structure, decide the trustees’ actions, and determine how beneficiaries get their inheritance. Finally, you have the funding of the trust, which is arguably the most important aspect.
Creating your Trust in Oklahoma
The person who creates a trust is called the Grantor, or Settlor. (Think of the Oklahoma sooners and the 1889 land run, where pioneers “settled their property”).
The first step in setting up a trust is identifying the parties. You are the grantor of your trust, since you are the one setting it up. Next, you must determine a trustee. This is a person who will trust to hold title to the assets. Finally, who do you want to eventually receive the assets? These are your beneficiaries.
At first, you may hold each role all by yourself. The trust’s purpose is to easily transfer control or benefits of the property when you die or become unable to manage it. Let’s break down what I mean.
Transferring control of your property through a trust
Transferring control happens when a successor trustee steps up. Your trust document will define when a successor trustee takes control. If you become incapacitated, like being in a coma or in the hospital, your trustee will need to manage your assets while you can’t.
Who controls your stuff while you are incapacitated is an important decision to make. Usually, this is your spouse. But if your spouse dies or becomes incapacitated, you will need a successor to replace him her. Remember, control is the ability to sign the check, make a withdrawal, pay bills, sell the property, and distribute proceeds.
Transferring the beneficial ownership through a trust
The other part of joint ownership is the right to receive the property or income, as well as the right to live on the property. This is a right held by the beneficiaries.
You may want to be the beneficiary while you are incapacitated. But if you die, who will that benefit transfer to? These are the decisions you have to make when setting up a trust in Oklahoma.
All of these decisions will be easier once you have consulted with an attorney. There are many reasons for having a thorough, in-depth design meeting with an attorney. We combine our consultation and design meeting into one working-meeting. If you would like to learn more about our process, send us an email or call our office at (405) 607-7799.
Designing the custom aspects of your trust
There is no “one-size-fits-all” version of a trust. You would never want something like that, anyway. Designing a trust is not about just getting the document in place. It’s about getting the right language in place to achieve your goals. You shouldn’t view estate planning as just shopping for documents, like wills and trusts. Instead, you want to think of estate planning as choosing desirable outcomes. Then, you create custom documents to achieve those outcomes.
The design aspect is crucial. You should consult an attorney before creating or downloading a trust document. You want to make sure the trust accomplishes the goals and outcomes that you want. In our next article, we will cover how to design a customized trust to achieve your goals.