How to Set Up a Living Trust Fund
- 1). Decide who will be the trustee and beneficiaries of your living trust fund. The trustee is often an attorney or law firm, but it can also be your spouse, eldest child or financial institution. Typically you and your spouse are the primary beneficiaries of the trust while you are living, with children or grandchildren perhaps becoming the beneficiaries after your death.
- 2). Designate a successor trustee (commonly a spouse) who will take over in the event you become incapable of handling your affairs. Until then you can serve as your own trustee or as a co-trustee with a spouse, child or attorney, which means you maintain control of your assets. The living trust becomes irrevocable when the last living trustor dies and the assets are distributed as the trust document specifies.
- 3). Determine what assets will be transferred to the trust. Transferring your assets is known as funding the trust, and if you fail to transfer ownership of the assets to the trust, it becomes ineffective. After your death, probate (will verification) court can be avoided for all assets placed in the living trust, promoting a smooth transfer to your beneficiaries.
- 4). Transfer the titles of any real estate assets into the name of your living trust fund. People sometimes forget to transfer any assets acquired after the trust has been established. The overlooked assets must go through probate after your death unless you also create a special type of will.
- 5). Set up a "pour-over" will to accompany your living trust fund. This kind of will turns over to the trust any assets that were never formally transferred to it and those assets acquired after the trust was created.
- 6). Consult with a lawyer, bank or certified financial adviser to set up a living trust fund. To get a customized trust to fit your estate planning needs, you may want to have the trust documents drafted by an experienced estate planning attorney. Having a lawyer or financial adviser draft your living trust could cost from $750 to $2,000 as of 2010, depending on the complexity of your estate and the rates in your area.
- 7). Create a revocable living trust yourself by purchasing and using software such as the Living Trust Maker by Nolo. You can also find assistance on websites such as LegalZoom, which requires a fee.
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