How To Create A Living Trust

By creating your living trust, you’ve arranged your estate in a way that makes it easy for your family and loved ones to settle your estate. Also known as revocable living trusts, living trusts are used to enable your beneficiaries to avoid the court and attorney-involved probate process after you pass away. The following are three steps to take when setting up your living trust.

Step 1: Be thorough in what and who matters to you

In order to create your living trust, you’ll need to be prepared to answer the same questions you would be asked if you were preparing a last will. Be prepared to answer the following questions: 

• Who do you want to inherit from you when you die? 
• Will they inherit any specific assets? 
• Will they inherit equally or in different proportions? 
• Will the inheritance of any beneficiaries need to continue to be managed in a trust after you pass away? 
• Who will be in charge of making the necessary distributions from your trust after you pass away?

Step 2: Go with your gut on your answers - you can always update later

Whether you get assistance from an estate attorney or an online platform, make sure you answer all the questions you are asked to the best of your ability. If there are questions that are tough to answer, it’s usually best to go with your first instinct - you can always restate your trust later if necessary.  Then, review the customized provisions of your trust instrument to ensure that it reflects your intentions.

Step 3: Make it official

Finally, sign your trust following the appropriate formality requirements to make it valid. Make sure you also do the following: 

• Transfer the appropriate assets, like real estate and brokerage accounts, to your trust to keep them out of probate. 
• Let your successor trustee know that you’ve named them to fill the role of settling your trust when you pass away. 
  

Do this and be rest assured that you’ve done most of the estate settlement work upfront, making the settlement of your estate faster, easier, and with less expense.

Even if you don’t consider yourself wealthy, you should consider establishing a living trust as part of your overall estate plan. The extra work you do creating your trust and transferring assets to your trust can save your estate and your heirs significant time, effort, and hassle in the future. A well-prepared living trust can also prevent conflict among relatives since the trust will clearly lay out each person’s rights and the settlement of your trust will be outside of government interference.