How to Establish an Estate Trust for Your Mother

Getting a trust established relieves unneeded stress.

Helping your mother properly plan her estate involves looking at her financial needs, the assets she has and creating a plan that helps her preserve assets throughout her lifetime. Ideally, funds should allow an enjoyable life with assets left over that pass to the next generation. Before you establish a trust for your mother, determine whether she is still capable of managing her assets or whether she needs you as a co-trustee or the sole trustee.

Things You'll Need

• Last will and testament
• Asset statements
• Property deed

Instructions

1. Determine if mom still has the mental capacity to manager the financial matters in her estate. If she does, the two of you can work together to establish a trust with both of you as co-trustees. If she is unable to manage matters, seek guardianship, sometimes called conservatorship, through the probate court in your county. A hearing will take place where medical and other evidence must be presented showing your mom is mentally incapacitated.

2. Meet with a family estate planning attorney. If the estate did enter conservatorship through the probate court, the trust will most likely be an irrevocable trust that determines how funds must be spent to provide mom with a suitable quality of life including medical, residential and social expenses.

3. Draw up the trust document that states who is creating the trust, who the trustee and successor trustee is, and list how assets should be used and passed to the next generation. If your mom is still mentally capable, a revocable living trust gives her complete control over her assets during her life; the trust becomes irrevocable after her death.

4. Sign the trust document as the trustee in front of a notary public to make it an official document.

5. Obtain a tax identification number for the trust from the Internal Revenue Service by calling 800-829-4933. This is needed to open any bank or brokerage accounts under the trust and file trust tax returns.

6. Fund the trust by titling all bank, brokerage and properties under the trust name and tax identification number. An unfunded trust means all assets out of the trust still go through the probate process.

Tips & Warnings

• A trust doesn't need to be created by an attorney. As long as it names the person establishing the trust, the trustee, lists the desires for assets and is signed in front of a notary public, it is a legal document. Write your own trust if you are trying to save money.

References

• Nolo Law for All: Making A Living Trust
• Nolo Law For All: To make a power of attorney for my mother, do I need her consent?
• IRS.gov: How to Apply for an EIN
• LegalZoom.com: Living Trusts
• State Bar of Wisconsin: Revocable Living Trusts