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Step 1
Choose trustee(s). How a trust is structured will be largely determined by its intended purpose. Living trusts are usually only designed to avoid probate. The granter might want to remain in control of the assets while he's alive by naming himself as the trustee. In this case, a successor trustee will need to be named to assume control after the granter's incapacitation or death.
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Step 2
Select beneficiaries. The granter of a living trust does not necessarily want to lose beneficial ownership of the her assets, so she usually names herself as beneficiary as well. To help ensure the trust's validity, she might also name a separate beneficiary, such as a spouse or child. If the granter is the original beneficiary, beneficial ownership of the trust assets on her death transfers to "remainder beneficiaries" so designated in the trust document.
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Step 3
Execute a Declaration of Trust. The terms of the trust should be encoded in a document called Declaration of Trust. In this document, all the original assets of the trust should be listed, as well as the parties listed above. Most trust documents also explicitly list the powers of the trustee (similar to a power of attorney), and the division of assets among the beneficiaries. Legal trusts are similar to contracts in that there is very few limits on how they can be designed, assuming the basic roles are all filled.
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Step 4
Transfer titles. The assets of the trust must be titled in the name of the trustee. Even if the granter remains trustee, he can have the title reflect his role as trustee. Retitling assets is an important part of showing the validity of a trust, though, since a living trust does not have the same effects as an irrevocable trust. There is a lower standard to surmount.
