How to Make a DIY Living Trust in 7 Steps

How to set up a living trust yourself in 7 steps

A DIY trust may sound simple, but it still requires adequate preparation, contemplation, and action that vary based on the needs of your trust and the location of your assets. Follow these seven steps to set up your living trust.

Step 1: Collect information

To formally transfer ownership of your assets, you first have to prove that those assets belong to you. Find deeds, titles, and other documents that prove ownership of your property, including account information or stock certificates for intangible assets. Then, make a list of your intended beneficiaries.

Step 2: Choose the type of trust

A living trust—also called a revocable living trust—is the most basic type of trust. Depending on several factors, you can choose between several types of revocable living trusts.

It's called a revocable trust because it allows you to modify or revoke your trust at any time. An irrevocable trust is more complex to set up, and you can't change or revoke it except under very limited circumstances and with the consent of the beneficiaries. Irrevocable trusts offer more asset protection for those who need it, and assets placed in an irrevocable trust aren't subject to estate tax upon death.

Step 3: Name a trustee and a successor trustee

Your trust determines how assets transfer to loved ones if you become incapacitated or die, so choosing a reliable trustee is critical. As the grantor, you can name yourself as trustee and your spouse as co-trustee. However, you must also name a successor trustee to take over if something happens to both of you.

Step 4: Draft the trust document

After deciding what assets to include and who will be involved, prepare the trust agreement (also called a declaration of trust). This document identifies the trustee and beneficiaries and sets the rules for asset distribution.

You can create the document using online templates, DIY kits, or estate planning services like LegalZoom. Just make sure to customize the document to fit your unique needs and comply with your state's laws.

Step 5: Get a trust review

While using online tools such as the ones listed above can save you upfront costs and potentially simplify the process, there are always risks involved in creating a DIY trust without having the document at least reviewed by a legal professional. Getting a trust review will likely be less expensive than hiring an attorney to set up the entire trust for you.

Step 6: Sign and notarize

Once your trust is prepared, you must typically execute it by signing in front of a notary public and/or witnesses. Requirements vary by state, so verify your local rules.

Here are a few examples.

• California and Nevada: Notarization required
• Texas and Illinois: Notarization not required
• New York: Notary or two witnesses required

Step 7: Transfer assets to the trust

To ensure your trust works, you must transfer ownership of assets into the trust by changing titles and updating beneficiary designations. How you transfer assets will depend on what the asset is and where it's currently housed.

• Real estate: You can use a quitclaim or warranty deed to transfer property. Get the deed notarized and file it with your county clerk, then verify the transfer with a title insurance company.
• Financial accounts: Contact your bank or investment institution to transfer accounts into the trust's name. You may need to close existing accounts and reopen them under the trust.
• Business interests: Review your operating agreement (LLCs) or bylaws (corporations) for transfer procedures. Execute an "assignment of interest" to transfer ownership to the trust.

Keep your trust documents in a secure but accessible location—though, you don't need to file them with any court or agency.