You can set up a living trust to distribute property after your death without going through probate. You can also use a trust to manage your business affairs if you're ever incapacitated. You can do this without affecting your ability to control and use your assets and property, by making yourself not only the settlor, or creator of the trust, but the trustee who manages it. For your trust to be worth anything, you have to transfer assets, such as the title to your house, out of your legal ownership and put it in the trust's name.
Create the living trust by drawing up a Declaration of Trust. There are software programs and self-help books you can use to do this without a lawyer's help. Among the questions to consider are which assets you want to transfer into trust ownership; who you want to name as the beneficiaries; and whether your trust will be revocable or irrevocable. An irrevocable trust offers tax advantages, but it's not easy to change, and you have to give up most of your control over the trust contents.
Choose a successor trustee to manage the trust when you're unable to. If you die, the trustee will transfer the trust assets to the trust beneficiaries; if you're incapacitated, the trustee will manage your affairs for you. The American Bar Association states that it's important to pick someone you trust and to give detailed, explicit instructions about his duties and how you want the trust's assets handled.
Complete the paperwork. First, sign the declaration of trust in front of a notary public. Then draw up a deed to transfer title to your house or other real estate from you to your living trust. The simplest way to do this is with a quitclaim deed, which doesn't make any claims or warranties about the title. All states require that the deed include the legal description and address of the property, the name and signature of the person conveying the title and a notary seal. Your state law may have other requirements as well.
Even with a trust, you should also have a will. If you acquire more real estate or other property later and don't transfer title to the trust, a will guarantees that the property will still be disposed of in accordance with your wishes. Unlike a will, a trust doesn't become part of the public record, which can keep more of your financial life private.
If you want to refinance your house after you transfer title to the trust, the lender may require you take personal ownership first. You'll have to convey title back to yourself, refinance, and then convey title back to the trust.
A graduate of Oberlin College, Fraser Sherman began writing in 1981. Since then he's researched and written newspaper and magazine stories on city government, court cases, business, real estate and finance, the uses of new technologies and film history. Sherman has worked for more than a decade as a newspaper reporter, and his magazine articles have been published in "Newsweek," "Air & Space," "Backpacker" and "Boys' Life." Sherman is also the author of three film reference books, with a fourth currently under way.