How to Make a Family Trust

By Anna Assad

A living family trust is a plan that controls the assets placed into the trust fund. A revocable living family trust is an agreement you can end at any time before death. An irrevocable living family trust can't be terminated except under circumstances allowed by state law -- and you usually need a court order. Both types offer drawbacks and advantages, but family trusts are commonly revocable because the trust owners retain ownership rights to the assets. You can create a family trust for any purpose -- and you can serve as the trustee of the revocable family trust.

Step 1

Write down the assets you want to include in the trust. You can fund the trust with various assets such as your house, retirement accounts and cash.

Step 2

Select a trustee. If you decide to act as trustee, you still need to name a trustee to succeed you when you die. Pick a person you trust to manage the fund properly. Speak to the person about trustee duties to confirm she's able and willing to handle the responsibility.

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Step 3

Make a list of beneficiaries. Beneficiaries receive income and assets from the trust.

Step 4

Write down the trust's distribution rules. Include how often income is paid to beneficiaries and the amounts, and any restrictions on what the money can be used for.

Step 5

Write down the goal of the trust and what benefits you want to receive. Trusts provide tax benefits, for example, but the way the trust is set up determines for what tax breaks it qualifies.

Step 6

Select a trust name. Use the family name in the trust's name, such as "The Johnson Family Living Trust", to make placing assets in the trust's name easy.

Step 7

Contact an estate attorney. Go the official website of the state bar association to find a trust lawyer. Arrange to meet with the attorney. Bring the asset list, the beneficiary list, the trust's name, the trust's rules, the successor trustee's name and the trust's goals with you to the appointment. Ask the attorney to draft a trust agreement.

Step 8

Check over the proposed trust agreement. Notify the attorney of any errors.

Step 9

Sign the final trust agreement. Keep the original in a safe place.

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How to Set Up a Blind Trust

References

Related articles

How to Name a Living Trust

A living trust is a plan in the form of an agreement that manages all the property you place into the trust while you're still living. A common estate-planning tool, a living trust is created by the preparation and execution of a trust agreement, a document that identifies the trust's owner, the trustee -- the person who oversees the trust -- and lists the trust's provisions. A living trust needs a name because the trust is the owner of all the assets placed into it. The name allows the trust's owner to identify the trust as the owner on property transfer papers, other legal documents and financial accounts.

What Items Should Be Put Into a Living Trust?

A living trust is created during a person's lifetime and comes in two types: revocable and irrevocable. A revocable trust allows you to freely transfer your property in and out of the trust. By contrast, the maker of an irrevocable trust cannot serve as trustee or exercise control over the trust's assets, so irrevocable trusts are less flexible than revocable trusts. Many people fund their revocable trusts with their most valuable assets, which usually include the family home, bank accounts and investments.

How Many Successor Trustees Can Be on a Living Trust?

A living trust is a legal document that enables you to transfer property at your death without sending it through probate. If you create a living trust, you generally name yourself as the trustee, the person who manages the trust property. You appoint the person or persons to succeed to this position in the document.

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