Make a Living Trust: A Quick Checklist
Living trusts aren't as complicated as they sound. Here are the few steps you need to make one.
Steps to Set Up a Living Trust
1. Decide whether you need a shared trust or an individual trust.
If you are married or in a domestic partnership and you and your spouse or partner own most of your property together, a shared trust may be the right way to go. Your other choice is two individual trusts. For more information, see How Living Trusts Avoid Probate.
2. Decide what items to leave in the trust.
You probably don't want to hold all your property in your living trust -- just the big-ticket items that would otherwise go through probate.
3. Decide who will inherit your trust property.
For most people, choosing family members, friends, or charities to inherit property is easy. After you make your first choices, don't forget to choose alternate (contingent) beneficiaries, too.
4. Choose someone to be your successor trustee.
Your trust must name someone to serve as "successor trustee," to distribute trust property to the beneficiaries after you have died. Many people choose a grown son or daughter, other relative, or close friend to serve as successor trustee. It's perfectly legal to name a trust beneficiary—that is, someone who will receive trust property after your death. In fact, it's common. Once you've made your choice, discuss it with the person you have in mind to make sure he or she is willing to take on this responsibility.
5. Choose someone to manage property for youngsters.
If children or young adults might inherit trust property, you should choose an adult to manage whatever they inherit. To give that person authority over the child's property, you can make him or her a property guardian, a property custodian under a law called the Uniform Transfers to Minors Act (UTMA), or a trustee. For more information, see Leaving an Inheritance for Children.
6. Prepare the trust document.
You can create a living trust document (formally known as a Declaration of Trust or trust instrument) yourself, if you have good information and help. Probably the easiest way to create the document is to do it online, with Nolo's Online Living Trust. You answer questions about yourself and your property, and the program will print out a living trust for you. If you prefer to use a book to make your own living trust, check out Nolo's Make Your Own Living Trust, by Denis Clifford (Nolo), which offers background information, trust forms and complete instructions.
7. Sign the trust document and get your signature notarized.
After making your trust document, you (and your spouse, if you made a trust together) must sign it in front of a notary public. Nolo's Online Living Trust and other living trust products provide instructions on how to get your trust notarized.
8. Transfer title of property to yourself as trustee.
This is a crucial step that, unfortunately, some people never take. But to make your trust effective, you must hold title to trust property in your name as trustee -- for example, if John Smith wants to hold real estate in his trust, he must prepare and sign a new deed transferring the real estate to "John Smith, trustee of the John Smith Revocable Living Trust dated June 4, 20xx."
9. Store your trust document safely.
You don't need to file your trust document with a court or any government agency. Just keep it in a safe place--for example, a small fireproof home safe--and tell your successor trustee where the trust document is and how to get access to it when the time comes.