Phase 1: Planning and Preparation

Step 1: Define Your Trust Objectives

Before creating your trust document, clearly identify what you want to accomplish:

Asset Protection :Shielding assets from creditors, lawsuits, or long-term care costs

Estate Tax Reduction: Minimizing federal or state estate taxes
Medicaid Planning: Preparing for potential long-term care needs
Special Needs Planning: Providing for beneficiaries with disabilities
Legacy Planning :Ensuring assets are distributed according to your wishes
Privacy: Keeping asset transfers and distributions private

Write down your specific objectives, as these will guide important decisions about trust structure, terms, and provisions.

Step 2: Inventory Your Assets

Create a comprehensive list of assets you plan to transfer to the trust:

Real Estate: Primary residence, vacation homes, investment properties
Financial Accounts: Bank accounts, investment accounts, brokerage accounts
Business Interests: Ownership stakes in businesses, partnerships, LLCs
Life Insurance: Policies and their cash values
Valuable Personal Property: Artwork, collectibles, jewelry, vehicles
Intellectual Property: Patents, copyrights, trademarks

For each asset, document:

Current market value How title is held Any outstanding loans or liens Documentation you have (deeds, titles, statements)

Step 3: Select Key Trust Participants

Trustee Selection

Choose your trustee(s) carefully, considering:

Financial responsibility and trustworthiness
Knowledge of financial matters Willingness to serve Potential conflicts of interest Geographic proximity to trust assets Expected longevity (for long-term trusts)

Consider naming:

Initial trustee Co-trustees (if appropriate)Successor trustees (at least two)

Beneficiary Designation

Identify all trust beneficiaries:

Current Beneficiaries: T hose who may receive distributions while the trust exists

Remainder Beneficiaries: Those who receive assets when the trust terminates

Contingent Beneficiaries: Those who inherit if primary beneficiaries are deceased

For each beneficiary, gather:

Full legal name

Date of birth

Social Security number
Current address
Relationship to you

Step 4: Determine Trust Terms and Provisions

Decide on key trust provisions:

Distribution Standards: When and how beneficiaries receive assets (e.g., specific ages, life events, trustee discretion)

Distribution Restrictions :Any limitations on how funds can be used
Trustee Powers: Specific authorities granted to trustees
Trust Duration: How long the trust will last
Spendthrift Provisions :Protections against beneficiaries' creditors
Trust Protector: Whether to include this role and what powers they'll have

Phase 2: Drafting the Trust Document

Step 5: Choose the Appropriate Trust Template

Select the trust template from your Trust Kit that best matches your objectives:

Standard Irrevocable Trust:
For general asset protection and estate planning
Medicaid Asset Protection Trust: Specifically designed for long-term care planning
Special Needs Trust:For beneficiaries with disabilities
Life Insurance Trust:For holding life insurance policies
Charitable Remainder Trust: For charitable giving with income retention

Step 6: Customize the Trust Document

Carefully complete your selected template:

Trust Name: Choose a name for your trust (typically "[Your Name] Irrevocable Trust")Grantor Information
:Your full legal name and address
Trustee Information: Names and addresses of initial and successor trustees
Beneficiary Information: Names and details of all beneficiaries
Trust Purpose :Clearly state the trust's purpose and objectives
Trust Property: Reference the Schedule A where initial trust property will be listed
Distribution Provisions :Specify how and when assets will be distributed
Trustee Powers: Detail the specific powers granted to trustees
Administrative Provisions: Include accounting requirements, compensation, etc.
Amendment Provisions: Specify limited circumstances when the trust can be modified, if any
Governing Law :State which state's laws will govern the trust

Step 7: Create Supporting Schedules

Prepare the necessary schedules to accompany your trust document:

Schedule A: Detailed list of initial trust property
Schedule B: Specific distribution instructions (if applicable)
Schedule C: Special provisions for specific beneficiaries (if applicable)

Step 8: Review the Completed Document

Thoroughly review your completed trust document:

Verify all names, addresses, and other personal information are correct
Ensure all assets are properly described in Schedule A
Confirm distribution provisions accurately reflect your wishes
Check that trustee powers are appropriate for your situation
Verify all pages are included and in the correct order

Consider having a trusted advisor or attorney review the document before execution.

Phase 3: Executing the Trust

Step 9: Arrange for Proper Execution

Prepare for the trust signing ceremony:

Participants: Gather all necessary parties:
You (the grantor)Initial trustee(s) (if not you)Notary public
Witnesses (if required in your state)
Materials :Have all required documents ready:
Trust document with all schedules
Identification for all signers
Any supporting documentation

Step 10: Sign and Notarize the Trust

Execute the trust document following these steps:

Review the entire document one final time
Sign and date the trust document in the presence of the notary (and witnesses if required)
Have the trustee(s) sign acceptance of their role
Have the notary complete the acknowledgment
Have witnesses sign (if required by your state)

Make multiple copies of the fully executed trust document.

Step 11: Obtain a Tax Identification Number

Apply for a Tax Identification Number (TIN) for your trust:

Complete IRS Form SS-4 or apply online at the IRS website
Provide the trust name and trustee information
Specify the type of trust
Receive and document the assigned TIN

This number will be used for all trust financial accounts and tax filings.

Phase 4: Funding the Trust

Step 12: Transfer Assets to the Trust

Begin the process of transferring assets to your trust:

Real Estate: Prepare and record new deeds transferring property to the trust
Financial Accounts: Contact financial institutions to retitle accounts in the trust's name
Business Interests: Update ownership documents, operating agreements, etc.
Personal Property: Execute assignments of tangible personal property
Life Insurance: Change beneficiary designations and/or ownership to the trust

For detailed instructions on funding your trust, see our

Trust Funding Guide

.

Step 13: Update Beneficiary Designations

Review and update beneficiary designations for assets that allow them:

Life insurance policies
Retirement accounts
Transfer-on-death accounts
Payable-on-death accounts

Determine whether these should name the trust or specific individuals as beneficiaries based on your overall plan.

Phase 5: Post-Creation Steps

Step 14: Establish Trust Administration Systems

Set up systems for ongoing trust administration:

Create a trust binder or digital folder containing:
Original trust document and all amendments
Deeds, titles, and other ownership documents
Financial account statements
Tax returns and records
Correspondence related to the trust
Establish a record-keeping system for:
Income and expenses
Distributions to beneficiaries
Investment transactions
Tax information

Step 15: Notify Relevant Parties

Inform appropriate parties about the trust:

Beneficiaries (as required by state law)
Financial institutions holding trust assets
Insurance companies for policies owned by the trust
Tax professionals who will prepare trust tax returns
Other advisors involved in your financial planning

Step 16: Schedule Regular Reviews

Plan for periodic reviews of your trust:

Annual review of trust investments and performance
Biennial review of trust terms and provisions
Review after major life events (births, deaths, marriages, divorces)Review after significant changes in tax laws or regulations
Review when trustee circumstances change

Regular reviews help ensure your trust continues to meet your objectives and operates efficiently.

Conclusion: Your Trust Creation Roadmap

Creating an irrevocable trust is a significant step in securing your financial legacy and protecting your assets. By following this step-by-step guide, you can navigate the process with confidence, knowing that you're establishing a legally sound trust that accomplishes your specific objectives.

Remember that while this guide provides comprehensive instructions, each person's situation is unique. The Trust Kit provides the flexibility to customize your trust to your specific needs while maintaining legal compliance across all 50 states.


By taking the time to properly plan, draft, execute, and fund your trust, you're creating a powerful tool that will protect your assets and provide for your loved ones according to your wishes for generations to come.