If you are planning to make a living trust part of your estate plan, you probably know establishing and funding a living trust is a process that involves many complicated details. If you execute a living trust but fail to add certain assets or leave out important provisions, your living trust may not accomplish what you intend. You may spend several hundred dollars, and in some cases several thousand dollars, on the preparation of your living trust.
Pennyborn.com's Living Trust Checklist is a free estate planning form designed for individuals who need help making a living trust.
Before you begin the process, use the Living Trust Checklist to ensure you have a thorough understanding of what is involved, including documents such as an abstract or certification of trust and trust transfer deeds.
This form provides a detailed list of actions you will need to take to create and fund a living trust. It will also help you stay organized as you go through the process of making your living trust by providing a place for you to track the status of each action item and insert important deadlines. Download the form using the PDF icon below and print as many copies as you need.
Before you begin the process of making a living trust, there are two important issues to address. The first is whether you need a living trust. For tips on how to decide whether you need to make a living trust to accomplish your estate planning goals, see
more about trusts. The second issue is whether a living trust is the right type of estate planning trust for you. There are many different types of trusts and there are several types of non-probate transfers that may be better alternatives for your particular objectives. To compare different types of trusts, go to our page on
other types of trusts.If you have decided a living trust is the best type of trust for you, the next step is to have it drafted and then execute it in accordance with the state law requirements for the state where you are domiciled. For an overview of how to make a living trust, see our free Guide to Living Trusts. Although our free Guide to Living Trusts is a great way to get preliminary information about establishing a trust, you will need a more comprehensive trust guide to maintain your living trust and understand how it works with other documents in your estate plan.
To find a living trust guide, go to Will and Trust Books.
Transferring Property to Your Living Trust
Perhaps the most important step in establishing a living trust is transferring assets to the trust. After all, your living trust will not be of much benefit to your beneficiaries if it does not hold any money or property. Unfortunately, many people make the mistake of assuming that if they signed a living trust document, their living trust is set up and their estate will pass according to their wishes. They may sleep well at night thinking they have taken care of their spouse or children by making an estate plan. However, if they failed to complete the essential step of funding the trust, any property they own that has not been transferred to the trust will pass as if the trust did not exist, meaning it may be subject to probate. Failure to properly fund a living trust can result in the beneficiaries named in the trust being disinherited or receiving less property than the grantor intended.If you execute a living trust document, you must make absolutely sure you also complete the process of funding the trust. To complete this step, all property you want to pass through the living trust must be titled in the name of the trustee of the living trust. In a typical living trust, the maker of the trust, called the settlor or grantor, is the original trustee of the living trust. Of course, if you named another person as original trustee of your living trust, then title to trust property should be taken in that person's name as trustee. For more details, go to
living trust property.
Note: Because living trust laws vary from state to state, the proper way to title living trust property may be different in your state. Only a licensed attorney can advise you on how to hold title to living trust property.
If your living trust was prepared by an attorney, you should have received instructions on the exact wording of title to trust property. Refer to the
Certificate of Trust Form that may be included with your living trust documents. If you used estate planning software to make your living trust, the trust document should indicate the language for title to trust property. If you have any doubts about the wording of
title to property you want included in your living trust, contact an attorney and get specific instructions on this very important issue.
How to Change Your Living Trust
At some point, you may need to change your living trust. It could be that you want to name a different successor trustee, you may want to add or remove property from the trust or you may want to name different beneficiaries to inherit your property. If you only want to make very simple changes, you usually do not have to make an entirely new living trust. Instead, you should be able to amend the trust by executing a
Trust Amendment Form. If you are making substantial revisions to your living trust, it may be necessary to replace your old living trust with an entirely new living trust document.Do not attempt to make any changes to your living trust document without the assistance of an attorney. If you do it alone, you could make your entire trust document invalid. Also, if you change your living trust, you may also need to revise your pour-over will. For an overview of the steps involved in changing a living trust, see
codicils and amendments.If you want to name a different beneficiary to inherit property from your trust other than the beneficiaries in your existing trust document, this can also typically be done by a simple trust amendment that your attorney can prepare. For an overview of the process, go to
change trust beneficiary.
How to Open a Trust Investment Account
If you own stocks, bonds or other securities in a brokerage account and have established a revocable living trust, you may want to transfer title to these assets to your trust. This can be done by opening a trust account and transferring the securities to the trust account. For information on how to open this type of account and the items you will need, see how to open a trust account.
Free Estate Planning Forms
To make a complete estate plan, you need more than a living trust. There are several other documents you should include. In addition to a will, power of attorney, and health care directives, there are other documents you should include, such as a last wishes form, a letter of instruction, and an estate plan coversheet. For a list of forms available on our site, go to free estate planning forms.
Using Living Trust Forms
If you are using estate planning software or preprinted forms to make a living trust without an attorney, you may make mistakes in preparing or executing these forms which could result in substantial legal costs for your estate and your heirs. For a list of the most common mistakes when using trust forms and how to avoid them, see
Using Living Trust Forms.