Setting up a Trust

Setting up a Trust. Guide to how to set up a trust and the main factors you must consider.

Types of Trusts

Prior to establishing a trust, you need to choose from among the following types of trusts available:

Set up a Revocable Trust

A revocable trust can be revoked and undone by the grantor at any point in time.

Set up a Irrevocable Trust

An irrevocable trust cannot be revoked or undone by the grantor once it has been established. More on What is an Irrevocable Trust.

Set up an Inter vivos Trust

An inter vivos trust is a trust which only takes effect during the grantor’s lifetime.

Set up a Testamentary Trust

A testamentary trust comes into effect when the grantor passes away, and are usually created in documents such as wills and living trusts – documents that only take effect at death. Testamentary trusts are irrevocable once the grantor passes away.

Establishing a Trust

In order to set up a trust, you need to transfer assets to the trust, thereby funding the trust. To fund a trust, assets must be titled to the trust. Real estate can be titled by first executing and recording a deed to the property to the trust, while portfolio assets can be transferred by requesting that stock and bond certificates be reissued to the trust.

As for bank accounts, they can be transferred by changing the name on the accounts. Miscellaneous assets such as antiques and jewelry can be transferred with a legal document called an assignment or bill of sale.