- 1). Identify corpus, or the core of assets that make up the trust. Usually these are income producing assets whose income is distributed to beneficiaries. The corpus can be an assemblage of or a single kind of asset, including financial, property, or real estate. The trust document can allow for additions to the corpus by the settlor or others.
- 2). Select trustee(s) and beneficiaries. It is quite common for a settlor to act as either a trustee or a beneficiary, but he cannot simultaneously be the sole trustee and sole beneficiary. The essential requirement of a trust is at least one other person (or corporation) acting in one of these capacities. The selection of trustee and beneficiary is usually related to the purpose and subject matter of the trust.
- 3). Draft the trust instrument. The document that creates an express revocable trust usually includes the words "Revocable Trust" in the title to avoid ambiguity. It is possible to use a revocable trust form to create a trust, but most settlors choose to consult a lawyer or professional estate planner. The trust instrument must clearly identify the settlor, the trustee(s) and beneficiaries of the trust. It should identify the initial corpus and who can add to or withdraw from it. The rules by which the trustee is to manage the trust and disburse assets to the beneficiaries should also be described. See Additional Resources for a sample revocable trust instrument.
- 4). Title assets in the name of the trustee. If the trustee is someone other than the settlor, the assets that constitute the corpus of the trust should be legally held in the name of the trustee. If the title signifies the property is held "in trust" it could be required that the terms of the trust be disclosed before the property is sold.
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