Creating a Living Trust

by M-Gillies

A Living Trust may seem scary and stressful, but some say that they are as easy to prepare as a will.

You’ve decided to create a Living Trust – so how is one made?
This can be done in two ways, the first using the assistance of a professional, such as a lawyer, which, while it will save a couple of hours of research, could end up costing you between $1,000-$2,000. However, instead of parting with such a large sum of money, other options due prevail. If you’re willing to do-it-yourself, there are three ways of making a Living Trust using either a book ($30), software ($50) or completing a form online ($70).

Living Trusts are said to be as easy to prepare as a will. To begin drafting a standard Living Trust, you must first start off with a lot of legal boilerplate (legal language for creating a non negotiable contract), after which, the following information can be added:

  • The name of the person creating the trust (called the grantor, settlor or trustor);
  • The name of the person who will manage the trust (the trustee);
  • The name of the person who will take over as trustee and distribute property in the trust when the trustor dies or becomes incapacitated (the successor trustee);
  • The names of the people who will receive property in the trust (beneficiaries);
  • The name of the person who will manage the property left to young beneficiaries

When a trust agreement is finished, it is signed by a rotary (lawyer) and to officiate the finalization of the agreement, all property to be distributed under its terms must be transferred into the name of the trustee using a deed or other standard transfer document.

Some quick facts about Living Trusts:

  • A trust or (you) can also be the trustee of the Living Trust;
  • The successor trustee can be any individual selected, but is generally a spouse, relative, grown child or close friend.
  • If you are married or in a domestic partnership, a trust can be considered a cooperative trust or shared trust.

The role of the trustee include:

  • The collection, reinvestment and distribution of income capital;
  • Custody and safekeeping of assets;
  • Reporting to beneficiaries;
  • Tax preparation and filing;
  • Maintenance of records.

Read more:

http://www.ehow.com/how_139030_create-living-trust.html

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