A living trust often forms a vital piece of many estate plans. Living trusts, also known as revocable living trusts or inter vivos trusts, provide numerous potential benefits. In order to create such a trust, you must make sure that you meet some specific elements as required under the law. You should speak to an expert estate planning attorney if you want to create a trust, but here are some of the important elements.
Settlors and Property
When you create a revocable living trust, you establish a relationship between key people. You, as the settlor—the person creating the trust—transfer some of your property to the trust for it to own. You will name a trustee who is in charge of managing the trust property, as well as a beneficiary who has the right to use or benefit from the trust property.
Funding the Trust
Your trust will not become effective until you fund it. Funding a trust means that you transfer property to the trust to own. Sometimes this funding process is rather simple, but other times it will be more complicated. For example, if you want the trust to own real estate you will have to retitle the property in the trust’s name.
Creating the Trust Document
The trust documents will detail the terms of the trust, as well as name the beneficiaries, the trustee, and any relevant conditions or rules you want to establish. Trust documents need to state your intentions and your choices clearly.