How to Make a Living Trust Legal
By transferring your assets to the ownership of a living trust, you can keep the assets from going through probate. At your death, the assets are distributed according to the instructions in the trust, instead of your will. If you make yourself the trustee, you can continue to manage the assets--your home, an investment account--as if you still held title.
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Types
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As the "settlor" creating the living trust, you can make the trust revocable or irrevocable. With a revocable trust, you can take assets back out or cancel the trust completely, but an irrevocable trust is fixed once you set it up. Because you can't take the assets back out, the assets are not considered part of your estate. This protects the assets from estate taxes and from your creditors. Unlike a will, which becomes part of the public record during probate, the terms of either type of a living trust remain confidential.
Planning
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You might not need a lawyer to create a living trust, according to the Nolo legal website. You can draft a Declaration of Trust using legal self-help books or software. Before drawing up the declaration, decide which assets you want to place in the trust, how you want them distributed after your death and who you wish to appoint as your successor trustee, to manage the trust after your death. Check that your chosen successor is willing to accept the responsibility. Include instructions in the declaration for how you want him to proceed.
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Process
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Once you've finished the Declaration of Trust, sign it in front of a notary. Some states require you register the declaration with probate court, but if you don't, the trust is still valid and there's no penalty for not registering. After the trust is notarized, you must transfer your chosen assets into it. For accounts, follow the instructions of the bank or brokerage; for real estate, use a quitclaim deed to convey title to the trust. Record the title transfer with the registry of deeds.
Incapacity
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You can also use a trust to protect your assets if you become incapacitated by injury or illness. To do this, write in the declaration that the trust takes effect if you're alive but incapable of making decisions, and instruct the successor trustee on how to manage your assets. This could include using money in the trust to pay your mortgage or filing taxes on real estate owned by the trust. Then notarize the trust just as you would if it concerned your estate.
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