How to Prepare Your Own Living Trust

A living trust is an agreement that leaves assets to beneficiaries after the grantor's death. The main benefit of a living trust is that probate is avoided. The living trust can be revocable or irrevocable. A revocable living trust can be altered or ended by the grantor at anytime. An irrevocable living trust is permanent and cannot be ended. An irrevocable living trust has more legal requirements of oversight than a revocable one does. The most common type of living trust, which this article addresses, is a revocable living trust.

Difficulty: Challenging

Instructions

Things You'll Need:

• Paper and pen Computer and printer or typewriter List of assets Notary

Create the Living Trust Agreement and Name Parties to the Trust

1. Name and create a living trust agreement. The agreement should be titled with the name of the trust. For instance, if you were to name the trust " The Smith Family," the title of the living trust would be "The Smith Family Living Trust." An agreement can be handwritten or typed. The living trust agreement can be written solely in your own words or you can obtain a form from a self-help legal book such as "Create Your Own Living Trust" by Nolo Press. Self-help forms allow you to simply fill in the blanks to input the required information. The living trust agreement needs to include the items listed in the following steps.

2. List the "grantor, settlor or trustor" in the living trust agreement. Include the grantor's Social Security number and address in the agreement. Grantor, settlor and trustor all mean the same thing. It is the person who is putting her assets in the trust. In a revocable living trust, the grantor can change the name of the trustee and make changes to the living trust agreement when the desire arises.

3. Name the trustee in the agreement. Include the trustee's Social Security number and address in the agreement. The trustee is the person who manages the trust. Most people choose to name themselves as the trustee so that they can maintain control of their assets. A grantor can also serve as a trustee.

4. Name the alternate trustee in the agreement. Include the alternate trustee's Social Security number and address in the agreement. The alternate trustee is the person who manages the trust in the event that the original trustee chooses to no longer serve, becomes incapacitated or dies.

5. Name the beneficiaries in the agreement. Include the beneficiaries' Social Security numbers and addresses in the agreement. There can be only one beneficiary or multiple beneficiaries. A beneficiary is a person who will become the owner of the assets listed in the trust after the grantor dies.

List Assets, Fund the Trust and Finish the Agreement

6. List the assets that are to be included in the trust. Assets can be real estate, vehicles, bank accounts, royalties and other things.

7. List which beneficiary gets which particular assets in the trust. The trust can give certain assets to certain beneficiaries, or it can give a percentage of the value of the trust to different beneficiaries.

8. List any special requirements for the trust. For instance, you can include a requirement that a beneficiary has to reach a certain age before she is given control of the assets from the trust. Until she reaches the required age, the trustee would manage the assets.

9. Fund the living trust. Before a living trust is considered valid, it must be funded. To fund a living trust, assets must be put in the name of the trust. Checking accounts, bank accounts, vehicles and other things must be put in the name of the trust. Anything that is not put in the name of the trust is not legally considered to be part of the trust.

10. Have the living trust signed by a notary. A notary signature is required in some areas and not in others. Nevertheless, it is a good idea to have the trust notarized, to help prove that it is legitimate in case questions ever arise in the future. Make a copy of the living trust and give a copy to a person you consider to be reliable. That way if you pass away, there is a person that is aware of your wishes. Some areas require that you file a copy of the trust with the courts. Check your local rules to determine if you need to do this.

Tips & Warnings

• With a revocable living trust, you can update your living trust as the need arises. You can add or remove assets. You can add or remove beneficiaries. Always remember to title assets to the name of the trust in order for them to be considered part of the trust. Remember to include Social Security numbers and addresses for all parties of the trust to help identify and locate the parties when needed.
• This guide on creating a living trust is not meant to act as or replace legal advice. Rules regarding living trusts can vary in different areas. Laws can be complicated and living trusts are no exception. It is wise to seek the advice of an attorney in order to determine how a living trust will or will not benefit your situation. It is up to the reader to obtain legal advice. This article is meant to be a general guide and not legal advice. A reader that chooses to use this article as a legal resource has been warned and does so at his own risk.

Resources

• Make Your Own Living Trust--A Nolo Press Publication

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