How to Legally Designate a Revocable Trust

Plan to protect your house and property with a revocable trust.

Designating a revocable trust can be as easy as giving somebody a piece of property with verbal instructions that the person is to hold the property in trust for you or somebody else. This is called a verbal trust, and nearly every state in the United States recognizes a verbal trust. However, estate-planning experts will strongly advise that all trusts be in writing. Designating a legal trust in writing protects you and your property.

Things You'll Need

• Trust document
• Quitclaim deed

Instructions

Create Revocable Trust

1. Obtain a copy of a trust document that you can use as a form. Many online retailers sell simple revocable trust forms for reasonable prices, as do many attorneys and law firms. Or you can get a form from somebody you know who has created a revocable trust in your state.

2. Designate a trustee to manage, invest and disburse the trust property. The trustee can be you, a friend or family member you trust, an attorney or a trustee department at your bank.

3. Designate at least one, but more if you want to, beneficiary to receive trust income and distributions.

4. Draft in the trust document any special instructions you want the trustee to follow, such as how to invest the trust property, how to disburse the trust property, what bank account to use or anything else you have in mind.

5. Designate the property you want placed in the trust. If you want to put real estate in the trust, you need to draft a quitclaim deed conveying the property to the trustee.

6. Sign the trust document in the presence of a public notary. Most state laws do not require a notary acknowledgment, but it is strongly recommended because it can help resolve any evidentiary disputes over whether you actually signed the trust, particularly if the trust is to survive after you die.

Tips & Warnings

• Be wise in deciding what property to transfer to the trust. Not all property is a good candidate for inclusion in the trust. For example, you should not include personal checking accounts, retirement accounts or other property that you use on a frequent basis.

• You should probably include property you will own long term, such as your home, any investment property you own and any family heirlooms you might have.

• If your net worth exceeds $1 million, you should consider an irrevocable trust instead of a revocable trust. Before making that decision, you should consult with a competent estate-planning professional who can advise you on income and estate tax savings you might realize from an irrevocable trust.

References

• Nolo: Living Trusts
• "Make Your Own Living Trust"; Denis Clifford; 2009