Setting up a trust is one of the best ways to preserve wealth, avoid probate, and protect your assets. If you’re looking to set up a trust for wealth preservation, follow this step-by-step guide!

Here’s how to set up a trust for wealth preservation.

Step 1: Determine What Type of Trust You Need

First, decide what type of trust is right for you:

• Revocable Living Trust: Can be changed or revoked during your lifetime, avoids probate, manages assets during incapacity.
• Irrevocable Trust: Can’t be changed or revoked once created, offers greater asset protection and tax benefits.
  • Irrevocable Life Insurance Trust (ILIT): Removes life insurance proceeds from your taxable estate.
  • Grantor Retained Annuity Trust (GRAT): Transfers appreciating assets to heirs with minimal gift tax cost.
  • Charitable Remainder Trust (CRT): Provides income to you, then the remainder to charity.
  • Spendthrift Trust: Protects assets from beneficiaries’ creditors.

Step 2: Choose a Trustee

The trustee manages the trust assets and follows the trust terms. You can choose:

• Yourself (for a revocable trust, you can be the initial trustee)
• A family member or friend
• A professional trustee (bank, trust company, or attorney)
• A corporate trustee (for larger, more complex estates)

Step 3: Choose Beneficiaries

Beneficiaries are the people or organizations who will receive the trust assets. You can choose:

• Family members
• Friends
• Charities
• Future generations

Step 4: Draft the Trust Document

Work with an experienced estate planning attorney to draft the trust document. The document should include:

• The name of the trust
• The grantor (you)
• The trustee
• The beneficiaries
• How assets will be managed and distributed
• Terms for incapacity
• How the trust can be modified or terminated

Step 5: Fund the Trust

Funding the trust means transferring your assets into the trust. For example:

• Real estate: Deed the property to the trust
• Bank accounts: Transfer ownership to the trust
• Investments: Retitle stocks, bonds, and brokerage accounts to the trust
• Business interests: Transfer ownership to the trust
• Personal property: Assign ownership to the trust (e.g., vehicles, jewelry

Type of Trust	Key Benefit
Revocable Living Trust	Avoid probate, manage during incapacity
Irrevocable Trust	Asset protection, tax benefits
ILIT	Remove life insurance from estate
GRAT	Transfer appreciating assets
CRT	Income for you, remainder to charity

Step 6: Sign and Notarize the Trust Document

Sign the trust document in front of a notary public. Some states require witnesses too.

Step 7: Keep the Trust Document Safe

Store the original trust document in a safe place (e.g., safe deposit box, with your attorney) and give copies to your trustee and beneficiaries.

Common Mistakes to Avoid

• Not funding the trust (a trust without assets is useless!)
• Choosing the wrong trustee
• Not updating the trust after major life events
• Trying to do it yourself without an attorney (especially for complex trusts!)

Frequently Asked Questions

How much does it cost to set up a trust?

Cost varies by complexity and location—simple revocable trusts cost a few thousand dollars, complex irrevocable trusts cost more.

Can I be the trustee of my own trust?

Yes, for a revocable trust! But you should name a successor trustee for when you’re no longer able.

How long does it take to set up a trust?

A few weeks to a few months, depending on complexity.

Final Thoughts

Setting up a trust is a powerful way to preserve wealth and protect your assets. Work with an experienced estate planning attorney to set up the right trust for your needs!