Protecting your assets in a basic living trust makes it easier for your loved ones to benefit from your wealth after your death. Setting up a trust only requires three documents, all of which you can fill out on your own or with the help of a professional. Once your paperwork is complete, fund your trust to make it effective. Assets held in a trust are protected from creditors.
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Things you need
- Living Trust
- Agreement for Sale and Purchase
- Deed of Acknowledgment of Debt
Decide what type of trust you wish to establish. Opt for an individual trust, if you wish to independently own the trust, or a shared trust, if you wish to co-own the trust with a spouse or minor child.
Select a trust name. For example, John Q. Public might opt for "The John Q. Trust" or "The John Q. Public Trust." Either option is appropriate.
Select the assets that will fund your trust. An asset is an item that can be easily converted into cash. Examples are real estate and furniture. Hire an appraiser to evaluate each asset.
Identify the "who's who" of your trust. Appoint a successor trustee -- the person who will distribute your assets after your death -- and select beneficiaries, such as children or relatives. As the granter -- the person who set up the trust -- you will maintain complete control over the trust.
Download and fill out a living trust from an online document supplier, such as Nolo's Living Trust, Legal Zoom or DocStoc. A living trust is straightforward. For example, Nolo's Living Trust allows you to answer questions about yourself and your property. The program will print out your living trust once you are done.
Sign and date your living trust in front of a notary public (fees may apply).
Turn ownership of your assets over to your trust. Start the twofold process with an Agreement for Sale and Purchase, which retitles your assets to your trust, and a Deed of Acknowledgment of Debt, which loans your trust the money to purchase your assets. (See Resources for a sample Deed of Acknowledgment of Debt.)
Tips and warnings
- Provide your trustee with copies of your living trust documents.
- Cost-based professional assistance from an attorney or title company is available to help you set up a living trust.
- A living trust is a legal instrument that outlines the details of a trust.
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