Setting Up a Trust

If you decided that a trust will benefit you and your family, you may be wondering what steps you should take from here. As you begin the process, remember that a trust should meet your needs and the needs of your beneficiaries. An experienced estate planning attorney can help you tailor your trust so that it meets your expectations and avoids as many taxes as possible. To begin creating your trust, there are a number of things you should do to ensure that it will effectively protect your assets from estate tax and probate.

Steps to Making a Trust

To make sure that your trust successfully safeguards your property and maximizes your assets for your beneficiaries, take the following steps:

  1. Decide what property should be put in the trust. It is not necessarily beneficial for all of your items to be put in a trust. Usually, only valuable items benefit from a trust, which could include real estate, bank accounts, insurance, business shares, stocks, expensive art pieces and jewelry, and other prized items. Note that you can add items to your trust at any time. List out each item in detail, so there is no confusion.
  2. Choose your beneficiaries. You can select family members, friends, or whomever else you like. You can also choose a charity to receive funds, which will allow you to avoid tax on the funds that go to the charitable beneficiary. In naming the beneficiary, you can include their name and title or by their relationship to you as a group. You could also name alternate beneficiaries, should one of your beneficiaries not be living at the time the property is to be transferred.
  3. Determine the type of trust. There are numerous different types of trust, there may be one or more that will suit your specific circumstances best. The type of trust you choose will be based on the property that you wish to protect, as well as the status and relationship of your beneficiaries.
  4. Name the successor trustee. Upon your passing, a successor trustee might need to distribute your property to the proper beneficiaries. Be sure to discuss the duties with the person you choose. Once the trust is complete, you should also let the successor trustee know where you are keeping the document.
  5. Draft and sign the trust. Before writing out the trust, check the laws of your state. Some states require that a licensed attorney drafts the trust, while others allow individuals to do it themselves. Be especially careful when using an online service, as it may not be completely accurate. Once the draft is complete, make sure to sign the trust and get it notarized.

Once these steps are complete, you need to transfer the title of the property to the trustee, whether that is you or another person. If you do not take this step, then your trust will be void. Without a legal trust, the state will be able to determine how your assets should be divided upon your death. Your estate will also be subject to tax and probate. To ensure that you complete all the proper steps, locate an attorney in your area to advise you. A competent probate lawyer should understand the laws of your state so that all mistakes are avoided.