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.
Set up a revocable living trust by creating a trust document, or having your attorney draw one up. You must identify yourself as the grantor of the trust, and designate a trustee to manage the assets, which you will place within the trust. You may name yourself as the trustee, although taking this step provides no protection for trust assets against the claims of creditors. If another person or organization is your trustee, you should also name a successor trustee who will take over responsibility should the trustee withdraw or otherwise become unable to carry out your instructions.
Identify the assets that the trust will contain. A trust can include cash, stocks, mutual funds, real estate, business interests and anything else of value that you wish to control as part of your estate. The trust should name the account in which the assets are held, as well as the custodian of the account, whether a bank, investment company, broker or other entity.
Name your beneficiaries – the individuals or organization that will inherit your property after your death. You can specify how the trust will distribute those assets, or provide other instructions that the trustee will be legally bound to follow in the event of your death. You may include or append a power of attorney, which gives the trustee or another individual the authority to act on your behalf if you become incapacitated. You may also disinherit any beneficiary who challenges the trust -- an option not usually available with a standard will.
Fund the trust by transferring title to your property to the trust. In the case of cash, investments, savings accounts and other monetary instruments, you simply move the assets from your own accounts into an account established with the trust as owner and the trustee as custodian. In the case of real estate, you must have the property title transferred through a procedure established by the local bureau of records.
Make the trust legal by signing it in the presence of witnesses. A witness should not be a beneficiary of the trust.