How to set up a family trust fund

Written by jerry shaw
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How to set up a family trust fund
A family trust is set up to pass on assets to family members. (family image by Mat Hayward from

A family trust is set up to pass on assets to family members. People set up family trusts when they are still alive or as part of a will. When you set up a trust, you can transfer your assets to it immediately or over time. You no longer have ownership of those assets, but you have control over a trust. A family trust is a good idea for people who are building wealth and want to keep it safe. A trust makes certain the assets you put there are protected from claims of creditors. It helps provide equality in treatment of children, grandchildren or other beneficiaries. A trust also avoids probate, a costly court procedure that determines the legal ownership of your property upon death. Details of your finances are kept private.

Skill level:

Things you need

  • Trustee
  • Assets

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  1. 1

    Choose a trustee to handle your family trust. This can be a family member or someone who is reputable and has experience in managing a trust. A person establishing the trust may also be a member of a trustee board overseeing the trust. The trustee maintains and is responsible for all records about the trust.

  2. 2

    Decide who will be the beneficiaries of the trust. They will benefit from the assets of the trust upon your death or according to your wishes. Future children or in-laws may be added to the trust later.

  3. 3

    Establish the kinds of benefits the beneficiaries will receive from the trust and make it clear how and when these benefits will be distributed.

  4. 4

    Draft the terms of the trust.

  5. 5

    Provide the trustee with the property and assets that will go to the beneficiaries.

Tips and warnings

  • Get financial and tax advice from professionals on setting up a trust. You can get professional help in forming the trust or establish it on your own using professional legal services.
  • Make sure your trustee has the expertise to handle the trust throughout its life. A lack of documentation could lead to loss of asset protection.

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