A trust is a legal entity set up by an individual or corporation to secure property or funds on behalf of another individual or entity. A trust can be set up as a revocable trust that can be terminated by the trust creator, or it may be set up as an irrevocable trust that cannot be changed. A trust is often established to set aside funds for a minor child until a predetermined future date when a child can collect the funds or property. Trusts are also used to protect assets and set aside finances to care for an individual in his elder years.
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Determine what type of trust you would like to establish. Decide whether it will be a revocable trust or an irrevocable trust. Determine also if you will be the trust executor or choose to hire an outside agency to manage the trust. Make a list of the assets and finances you would like to include in the trust. Consult with any business partners or spouse who may be involved in the trust's creation, and outline an agreement for the creation and disbursement of all trust's assets.
Note your priorities for the trust and the goals you desire to achieve. You may want to establish a trust to earn income for the future, or you may have a goal to provision your assets to beneficiaries in the event of your death. Specify who the beneficiaries will be, and consider making provisions to add beneficiaries as needed to accommodate the birth of additional heirs in the coming years.
Consult a trust attorney or estate planner to help you plan the construction of the trust agreement. Ask about the tax implications and insurance needs for the trust and how the trust should be structured to provide the most protection and benefit. Discuss the need for an executor to determine if you want to appoint an individual or trust administration firm to handle the execution of your trust.
Draft your trust agreement according to the specifications you have outlined. Hire a trust attorney or estate planner to formulate the trust documents and legally file them. You can also use an online legal document preparation service to formulate the trust documents yourself. Print out the documents and have them notarised or filed with the courts.
Fund the trust with the assets you wish to transfer to the trust. Change the legal title of the assets from your name to the trust. Consult your attorney to ensure all assets are properly registered to the trust.
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