How to Set Up Family Trusts in the USA
A trust is a legal relationship that allows one or more people to share and transfer property in a way that avoids probate and can reduce or eliminate estate and inheritance taxes. A family trust is a specific type of trust that is created among family members.
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Things You'll Need
- Trust form
- Trust schedule (a list of all property to go into the trust)
- Name of trustee
- Names of family beneficiaries
- Public notary
- Deeds of conveyance for property requiring written title
Instructions
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1
Locate a good trust form to use as your template. You can find trust forms from attorneys, from other people who have created similar trusts, or from online retailers such as legalzoom.com, USlegalforms.com and Nolo.com.
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2
Insert the name and contact information of your trustee.
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On the trust schedule, list all of the property you want included in your trust. This can include personal property, real property, bank accounts, stocks and bonds, and any other property that you want included in the trust.
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List one or more of your family members as trust beneficiaries. Listing a family member as a beneficiary gives that family member the right to receive trust income or distributions.
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5
Sign the trust deed and have it acknowledged by a public notary. While notarization is not legally required, it is a good practice just in case the trust is ever challenged in court.
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6
Draft deeds of conveyance for any property listed on the trust schedule that requires written evidence of title. For example, if you transfer your home to the family trust, you will need to execute a deed conveying legal title to the trust.
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For real estate conveyed to the family trust, record a copy of the deed with the county recorder in the county where the property is located.
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Tips & Warnings
Legally speaking, there is nothing special about a family trust compared to any other type of trust. As a practical matter, a family trust is just a trust where all of the beneficiaries are members of the same family. A family trust is a convenient way to share and transfer property to such family members as children, grandchildren and siblings.
When you create your trust you transfer legal title to your property to the trust. This means you are no longer the owner of the property. Think carefully before transferring any property, as it is often difficult to get that property back if you later change your mind.
