How to Create a Trust in a Will

By Elizabeth Stock

It is possible to include a clause in a will to have your assets distributed to a trust upon your death. This kind of trust is called a testamentary trust. The creation of a trust through a valid will may have several benefits, including the avoidance of probate. In addition, if you want to leave a considerable amount of money to a minor, like your child, a testamentary trust can provide oversight. For a testamentary trust to be recognized as valid, the will must be valid.

It is possible to include a clause in a will to have your assets distributed to a trust upon your death. This kind of trust is called a testamentary trust. The creation of a trust through a valid will may have several benefits, including the avoidance of probate. In addition, if you want to leave a considerable amount of money to a minor, like your child, a testamentary trust can provide oversight. For a testamentary trust to be recognized as valid, the will must be valid.

Step 1

Create a valid will. To be valid, a will must be in writing, you must have the legal capacity to create a will and understand that the document you are signing is a will. Each state differs in terms of the number of witnesses required, but generally, at least one witness must observe you signing the will. For example, in Illinois, two witnesses must be present when you sign your will. For assistance in drafting a valid will, contact an attorney or visit an online document provider.

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Step 2

Convey the necessary intent in your will to create a trust. For example, state in your will that upon your death you would like to have all or some of your assets transferred to a trust. It is usually not necessary to use specific language, but your intent to create a trust upon your death must be evident from a reasonable interpretation of your will.

Step 3

Fund the trust with trust property. You will satisfy this element upon your death, but you must specify what property to include in the trust. In addition, you do not have to transfer all of your assets to the trust but can specify which particular items you would like to become trust property.

Step 4

Name at least one beneficiary of the trust. The beneficiary is the person the trust is created to benefit. Use the beneficiary’s full name in the trust and avoid using generic terms, such as “my family,” that can be interpreted several different ways, making the identity of the benficiaries unclear.

Step 5

Include a valid trust purpose. The trust’s purpose can include anything as long as it is not illegal. For example, you can create a trust for the maintenance of your spouse and children, or you can create the trust for the educational benefit of one of your children.

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References

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How to Create a Revocable Trust

A revocable living trust allows you to provide for the distribution of your property after your death. When you set up a trust, you help your heirs and family avoid the probate courts, which must review and authorize any will. “Revocable” means that you can change the trust at any time, or cancel it altogether. Creating a trust is a straightforward matter of preparing and signing a document, which contains certain provisions and conforms to the law.

How to Set Up a Joint Revocable Trust

A joint revocable trust is a type of living trust where you with your spouse, or you with another party, assign property to a trust to be distributed after you die under the guidance of a trustee. Spouses typically use joint revocable trusts to avoid probate and create a living trust for both spouses in a single document. As the name suggests, a revocable trust can be revoked by one of the creators at any time. Joint revocable trusts will have different requirements and advantages in every state and as such, it's advisable to contact an estate attorney or a document preparation service before setting up a joint revocable trust. If you do decide to create a joint revocable trust, the allotted assets in the trust will pass through your trust at your time of death rather than through your will. Prior to proceeding, you will need to familiarize yourself with some terminology associated with trust funds. The person creating the trust is known as the grantor or trustor, while a trustee is the organization or individual in charge of administering the trust. A beneficiary is the individual who will receive the proceeds of the trust, while residuary refers to any property remaining in the trust after the beneficiary has received the benefits of the trust.

When Does a Testamentary Trust Will Go Through Probate?

When you die, many of your assets will have to go through probate before your estate’s representative can distribute them to your beneficiaries. Probate is the process whereby a representative for your estate gathers your assets, pays your creditors and distributes your remaining property under the terms of your will. Whether your will gives these assets directly to your beneficiaries or places them in a trust, your assets must go through probate.

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