How to Set Up Monthly Payments to a Family Member Trust
Funding a family trust is one way to benefit minor children, relatives and charity organizations as you see fit. Unlike offering a lump-sum cash gift, you can funnel money to a family trust and set provisions that cause the payments to build over time before a final payment is made to the beneficiary. When making cash payments to a family trust, you must complete the necessary paperwork and update key players about the payment.
Other People Are Reading
Instructions
-
-
1
Fund your family trust by transferring the name on your bank account to the name of the trust. The account is no longer be held in your name and is now held as property of the trust.
-
2
Set up monthly payments to the trust through a trust deed, which a local title company or attorney can prepare along with other required documents. Specify the payment amount and expected date of delivery each month. Your attorney notarizes your trust deed and files it with your county's probate court.
-
-
3
Fill out an Agreement for Sale and Purchase form. This document allows you to legally turn over complete ownership of your account to your family trust. Provide banking information, including your account balance, which must reflect the value available at the time of signing.
-
4
Fill out a Deed of Acknowledgment of Debt. This document allows you to legally waive payment for the value of the account. In other words, a Deed of Acknowledgment of Debt recognizes that you're transferring the monetary value of your account to your family trust as a loan.
-
5
Contact the person managing the family trust, the trustee. Update her on the trust documents and pending payments.
-
1
Tips & Warnings
A trust is protected under the law against creditors.
