How to Set up a Living Trust for Children
A living trust is a type of trust created when the grantor, which is the person who is creating the trust, is still alive. The main difference between establishing a living trust and simply willing the money to your heirs is that the living trust money is distributed faster than wills, which can be held up in probate court, according to Investorwords. Establishing a living trust, however, takes longer to create than a will. The grantor of the trust can make changes or completely revoke the trust while alive. Single parents tend to establishing living trusts for the their children. Parents also use living trusts for children in the event that one or both of the spouses dies.
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Instructions
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Choose a trustee. A trustee is the person you want to handle your trust once you pass away. The trustee is not responsible for making changes to the trust but is responsible for making sure that the living trust is provided to the children and carried out according to your instructions. The most common kind of trustee is an attorney.
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Choose an estate attorney or obtain a referral from your banker, attorney or financial adviser. If you do not already know an estate or trust attorney, talk with people with whom you have financial relationships to obtain a referral. A trust attorney can provide you with the documents you need to complete and provide you with advice on how to establish the living trust according to your wishes.
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Fund the trust by transferring cash and other assets that you want held in the trust. Remember, you still have access to the living trust assets while you're alive, but any assets in the living trust will pass on to the child for whom you set up the trust.
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Tips & Warnings
Online websites and software programs that provide the documents you need to establish a living trust. Most of the software programs walk you through, line-by-line, completing and filing the forms to establish a living trust. There is no legal guarantee with the forms and documents obtained in this manner, so if you feel uncomfortable with filing your own living trust documents, hire an attorney to help you through the process.
References
- Photo Credit Child image by Serenitie from Fotolia.com
