A living trust can be used to transfer property after your death, while avoiding the time and expense of court.A living trust is a good way to save time and money for your beneficiaries.Living trusts can be changed while you're still alive.Most of the time you don't need an attorney to make a living trust, and it's fairly simple.
Step 1: You want to create a type of trust.
Should you create an individual or joint trust if you are married?All property that belongs to you and your spouse is included in a joint or shared trust.There are two individual trusts that you and your spouse can create.A joint trust can dispose of both individual and shared property.
Step 2: List all of your assets.
You can use your list to figure out how to distribute your assets.You don't want to have all of your property in your trust.Leave retirement or investment accounts that allow you to designate a beneficiary out of your trust.Including them or designating your trust as the beneficiary adds an unnecessary layer of complexity.If you use your list as you work on your trust, you can figure out how to distribute your total estate.
Step 3: Take the paperwork for your assets.
To transfer title in your assets from yourself to the trust, you will need account numbers and locations.It is important that you have accurate information about your property in your trust documents.
Step 4: Whom will inherit your trust property?
When you die, the people you want to inherit your assets will be beneficiaries of your trust.If you include children as beneficiaries, you should name someone to manage the property until they reach adulthood.If your primary beneficiary is unavailable or refuses to take the trust property, you should consider naming alternate or back-up beneficiaries.
Step 5: You can choose a successor.
You will be the Trustee of your trust while you are alive.After you die, someone else will have to distribute the trust's assets.Most people choose a spouse or adult child to be their successor Trustee.If you are unable to take on the Trustee's duties, you may want to choose a back-up.Before you draft your documents, make sure the person you choose is willing to be your successor Trustee.If you are unable to act as Trustee, you may want to name an alternate successor.It's possible to name a bank or trust company to manage your trust after your death, but keep in mind there will be fees involved.Unlike with a will, your successor Trustee doesn't have to live in the same state as you.If you want a friend or relative who lives out of state to distribute your property after your death, trusts are often preferred.
Step 6: Consider talking to an attorney.
You can make a simple living trust by yourself, but you may need assistance if you have significant assets.You can buy a book or use an online trust preparation service for less than $100.If you hire an attorney to prepare your trust documents, you can expect to pay up to $1,000.You can always draft your documents and have an attorney look over them to make sure you have your intent.Attorneys usually charge less to review documents than to prepare them.There are different requirements for creating a living trust in each state.An experienced estate planning attorney licensed in your state will be able to determine if your trust documents meet state requirements immediately.
Step 7: Search for forms.
You should be able to find free templates or sample living trusts on the internet if you want to draft your own trust documents.Make sure the form is approved for use in your state, and that it covers the assets you plan to put into your trust.If you have a large estate, some forms may not work.
Step 8: You need to name and identify the trust.
Your name, trust name and type of trust are the first parts of your trust.You will list your own name as the grantor if you are creating a trust for your property.It doesn't have to be fancy to have a trust.You can identify the type of trust you have by using your own name.The Sally Sunshine Revocable Living Trust could be the name of your trust.
Step 9: Establish the responsibilities of the trustees.
If you're using a form or sample as a guide, make sure to read through it and understand what it means.You are considered the Trustee of your own living trust while you are alive.Your successor Trustee will take over and distribute your property to the people you have listed as beneficiaries after you die.You have the same rights and abilities to use, transfer, and sell your property as you did before you created the trust.Your successor Trustee will manage and distribute your property after you die.Your successor Trustee will be responsible for reporting any income earned from trust assets and transferring property ownership from the trust to your listed beneficiaries.
Step 10: The trust has beneficiaries.
The people who will inherit the assets you place in the trust are the beneficiaries.You can either list the property on your declaration or create a separate schedule of property.You could write "At the death of the grantor, the Trustee shall distribute the trust property in accordance with Schedule A, attached."
Step 11: The schedule of property can be created.
Attach a schedule to your declaration of trust if you want to list the property and assets included in the trust.If you create a separate document, you can amend it later on without having to make a declaration again.You can change the assets in your trust whenever you please.You can change the property ownership documents to reflect the trust if you decide to take something out or acquire a new asset.
Step 12: Please sign your trust.
You must sign your declaration of trust in person.A small fee is usually what you will have to pay to find a notary public at your local courthouse.Many banks give their customers free notary services.You may want to have more than one copy of your trust signed.You can provide another original copy of your records to your successor Trustee if you choose to do so.
Step 13: It's necessary to record or file your trust documents.
Although you don't typically have to file your trust with a court or government agency, you do need to keep it safe.You can keep your trust if you have a home safe.You can use a safe deposit box at a bank or post office.In addition to your personal copy, make sure your successor Trustee has his or her own copy and knows how to access it.Unlike wills, trusts don't have to be filed with the court and there will be no public record.People with privacy concerns prefer trusts.
Step 14: You can transfer the title to your trust property.
Your trust isn't finalized until you put the trust's assets in the name of it.If you add language indicating that you are now holding it in trust, the property will still be in your name.If real property is included in your trust, you will have to execute a new deed.Your new title or deed might say "Sally Sunshine, Trustee of the Sally Sunshine Revocable Living Trust dated July 4, 2016".You can use your own name and the date you executed your trust.After your signature, add "trustee" to any documents related to the property.
Step 15: You need to apply for an Employer Identification Number.
The trust needs an EIN to file a tax return.Even though the IRS doesn't require you to file a separate tax return for your trust while you are still alive, it may be necessary after your death if you have assets in the trust that earn income.Since you can get an EIN for free, it's easy to just go ahead and do it, rather than leaving it for your successor to do.You can apply for an employer identification number online.