How to Set Aside Money in a Trust
A trust is an effective way to manage property after you die or become incapacitated. When you want to set aside money for a trust, you need a trust fund account. A trust fund account is similar to a savings account, except that it is held for the benefit of some person or entity. The fund operates according to the terms of the trust; that is, the terms of the trust dictate how money can be deposited and withdrawn from the account.
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Instructions
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Create the trust. Generally, you need a declaration of trust that contains specific instructions as to how the trust will operate and who will oversee the trust and benefit from it. It must be signed and notarized. Because creating a trust is a legal process, readers should consult with an attorney before proceeding.
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Direct the trustee of the trust to open a trust account with a bank. You may either act as your own trustee if you have a living trust or you can appoint a trustee. The trustee must visit a bank of your choice and fill out any necessary paperwork and forms. If you are the trustee, you may also be able to transfer title to existing accounts into the name of your trust. Additionally, you can create separate trust accounts for certain beneficiaries or specific things such as investments.
For example, a trust could have separate trust accounts for each of the grantor's children and another trust account containing money to buy stocks. The declaration of trust should contain instructions for the trustee regarding how each account operates.
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Direct the trustee to deposit money into the trust accounts as necessary and according to the trust documents. Just as you deposit a paycheck into a personal savings account, you can deposit money for the trust into the trust accounts.
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Tips & Warnings
Depositing money into a trust account may cause you to lose control over and access to that money, depending on how your trust account is set up. Because a trust and a trust fund involve legal principles and actions that could affect the legal rights of the parties involved, you should consult with an attorney before proceeding.
