How to Set Up a Living Trust Fund & Live Off the Interest

by Mark P. Cussen ; Updated July 27, 2017

Living trusts can provide a wealth of financial and legal benefits for beneficiaries. They can accomplish various financial goals as outlined by the grantor, such as the provision of a stream of income that must last for a certain period of time.

Step 1

Draw up a living trust that specifies you as the beneficiary. You must hire an attorney to do this, or you can use the trust department at your bank. You will be the grantor, and should probably also be the trustee.

Step 2

Specify that the trust is being created for the purpose of providing you, the beneficiary, with an income stream. Include any other provisions that you need, such as the level of risk that the trust can take or details pertaining to how the income is paid.

Step 3

Fund your trust with income-producing instruments. This can include bonds, CDs, income mutual funds, REITs and Unit Investment Trusts, preferred stocks, utility stocks and oil and gas interests and royalties. If you have the investments you intend to use already, simply retitle them in the name of your trust.

Step 4

Make sure that your trust stays up to date at all times. If your investment objective changes, then you may need to revise your trust accordingly. Also specify whether you, as the beneficiary, will pay the taxes on the trust or whether the trust itself will be taxed (the latter is seldom done, because the tax rates for trusts are much higher than those for individuals).

About the Author

Mark Cussen has more than 17 years of experience in the financial industry. He received his B.S. in English from the University of Kansas and became a Certified Financial Planner in 2001. He has published financial educational articles on such websites as Investopedia and Money Crashers. He also provides financial education and counseling for members of the U.S. military and their families.