A living trust can be a tool for avoiding probate or for managing your affairs when you're incapacitated. Acting as the trust's "settlor," you draw up the documents establishing the trust, appoint a trustee to manage it and then transfer ownership of your investments, real estate or bank accounts to the trust. If you appoint yourself as trustee, you can continue to manage and use the assets just as you always did, including withdrawing money from the trust's accounts.
Create a Revocable Trust
There are revocable and irrevocable living trusts. As the names suggest, you can amend a revocable trust, but it's difficult or impossible to amend an irrevocable one. Creating an irrevocable trust also means surrendering control of the assets it holds. Because you're no longer the owner in either a legal or a practical sense, irrevocable trusts offer better tax and estate-planning advantages, but if you want to keep managing your assets, it may be the wrong choice.
List Your Rights in the Trust
Spell out your right to withdraw money in the trust documents. As Karin Price Mueller writes in the "Star Ledger," the law will usually allow you, as trustee, to take out money. Even so, incorporating this into the trust documents will give you extra protection.
Name Yourself a Trustee
Put the name of the trust, with yourself as trustee, on the ownership documents. For real estate you'll need to write a deed conveying title to the trust; for brokerage or bank accounts, you'll need to talk with the institution about the procedure to follow. Once you accomplish the transfer, you can take money out of the accounts in your capacity as trustee.
Transfer Your Assets
Sometimes settlors create a trust but never get around to transferring their assets. Your trust is useless until you put something in it. The assets placed in your trust are referred to as principal. If at any time you decide it's necessary, you can transfer ownership back to yourself. As long as it's a revocable trust, you, as trustee, can convey the title to any of the principal back to yourself as grantor. This may not be free, however. If you transfer title to real estate, you'll have to pay a fee to record the title conveyance, whether you're putting land into or removing it from the trust.
Appoint a Successor
When you create a trust, make sure to appoint a successor trustee. This individual will handle the assets if you're incapacitated or pass them to your heirs if you're deceased. The trust documents can spell out exactly how she's to manage the assets.