How to Make a Do-It-Yourself Living Trust

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.

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

A trust is an extremely important legal document that determines how your assets transfer to your loved ones in the event of your incapacity or death. Therefore, it's critical that you choose a reliable trustee to manage your trust. You can—as the grantor—name yourself as the trustee and your spouse as co-trustee, but you must choose a successor trustee to ensure your trust is in good hands should something happen to both you and your co-trustee.

Step 4: Draft the trust document

After you’ve made the important decisions about what will be in the trust and who will be involved in it, you’re ready to prepare the document itself, which is called a trust agreement or declaration of trust. This document identifies the trustee and beneficiaries.

The agreement sets up the rules for the trust and describes how the trustee is instructed to distribute the assets and what authority he or she has over those assets. You can create this document yourself using online resources, such as online templates, DIY kits, or online estate plan services like LegalZoom. However, it's important to customize any trust documents to fit your unique needs and 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 you have the trust prepared, you have to execute it. This typically means that you must sign it in front of a notary public and/or witnesses. This varies by state, so make sure you understand the requirements. For example, California and Nevada require you to notarize the trust document for it to be legally binding, but Texas and Illinois don't. New York requires a notary or two witnesses to sign the trust.

Step 7: Transfer assets to the trust

To ensure your trust is effective, transfer ownership of assets—such as stocks, bonds, investment accounts, and real estate—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.

To move real estate into your living trust, use a deed, such as a quitclaim or warranty deed, and consult with a title insurance company to verify that the deed was accurately transferred. In many states, you'll need to get the deed notarized and then file it with the county clerk in the county where the property is.

You can transfer financial assets—such as investments, bank accounts, money market accounts, or stock certificates—by reaching out to the relevant institutions and filling out any necessary paperwork. For example, you may have to close the bank account you want to transfer and then reopen a new one in the name of the trust.

The process of transferring business interests will vary based on your company's business structure. Typically, it involves checking your business operating agreement form (for LLCs) or bylaws (for corporations) to see if there is a process for transferring ownership to the trust. Then, you can execute an “assignment of interest.”

You don’t have to file the trust with any court or agency; just keep the trust documents in a secure location with fairly easy access.