How to Set Up a Living Trust: A Step-by-Step Guide

Before You Start: Do You Need a Living Trust?

A living trust takes more work than a will, and it only pays off in certain situations. It tends to help most when you own real estate, want to keep your estate out of public probate records, or own property in more than one state. It may not be worth the effort if your estate is small enough for your state's small estate affidavit process.

If you are still deciding, read what a living trust is and how it compares to a will first. Our Do I need probate? quiz can also show whether probate would apply to your estate at all.

If you decide to go ahead, the steps below follow the order most people work through them. Allow time for the last step. Funding the trust is where most of the effort goes.

Step 1: Choose the Type of Trust

Most people who want to avoid probate create a revocable living trust. You can change it or cancel it at any time while you are alive, and you keep control of everything inside it. An irrevocable trust cannot be changed that easily and serves other goals, such as certain tax or benefit-eligibility planning. Those cases usually call for an attorney.

Married couples have one more choice. You can each create a separate trust, or you can create one joint trust. A joint trust is simpler to manage, while separate trusts can give more flexibility after the first spouse dies. Your attorney or the service you use can walk through the trade-offs for your state.

For the longer comparison, see revocable vs. irrevocable trusts in our living trust guide.

Step 2: Decide Who Fills Each Role

Every trust has three roles. Write down a name for each before you draft anything.

• Grantor (also called settlor). The person who creates the trust and puts assets in it. That is you.
• Trustee. The person who manages the trust. In a revocable trust you usually serve as your own trustee while you are alive and well.
• Successor trustee. The person or institution that takes over when you die or can no longer manage your affairs. This is the most important choice you will make.
• Beneficiaries. The people or organizations who receive the assets. Name backups in case a beneficiary dies before you do.

Choose a successor trustee who is organized, trustworthy, and willing to do the work. They will gather the assets, pay final bills, and distribute the rest, much like an executor. Many people name an adult child, a sibling, or a bank or trust company. Name at least one backup, and ask each person before you list them.

One legal point matters if you plan to be your own trustee. Under the Uniform Trust Code, which Utah and many other states have adopted, the same person cannot be the only trustee and the only beneficiary. A living trust meets this rule because your heirs are also beneficiaries.

Step 3: List Your Assets and How They Are Titled

Make a list of everything you own, and note how each item is titled right now. Titling tells you what must change later. Use our estate inventory checklist to avoid missing accounts.

Retirement accounts and life insurance pass by beneficiary designation, not by trust ownership, so they follow a separate path in Step 7. Note them now anyway, because they still need to match your overall plan.

Step 4: Pick How You Will Create the Document

You have three practical options. The costs below are typical ranges, and they vary by state and by how complex your situation is.

An online service such as Trust & Will can produce a valid trust for a simple situation, and it costs far less than an attorney. It does not replace advice. If you own property in several states, run a business, have a child with special needs, or expect a family dispute, hire an attorney. A mistake in the document often shows up only after you have died, when no one can fix it.

We may earn a commission if you use a service linked above, at no added cost to you — see our affiliate disclosure.

Whichever route you choose, the person creating the trust needs the same mental capacity required to make a will. Do this while you are healthy, not in a crisis.

Step 5: Review the Document and Sign It Correctly

Read the full document before you sign. Check that every name is spelled correctly and that the trust is titled the way you want, for example "The Jane Smith Revocable Living Trust, dated October 2, 2026." Confirm the successor trustee, the backups, and how each beneficiary receives their share.

Signing rules differ by state. Many states do not require witnesses for a trust, but a notary is still the common practice. Banks and county recorders often ask for a notarized signature or a notarized summary of the trust, and the deed you record in Step 6 must be notarized in most places. The simplest approach is to sign in front of a notary and bring two witnesses if your service or attorney recommends it.

Keep the signed original in a safe place at home or with your attorney. Give your successor trustee a copy, or at least tell them exactly where to find it.

Step 6: Transfer Your Home and Other Real Estate

Real estate is usually the most valuable asset in a trust, so this step deserves care. You transfer it by signing a new deed that moves ownership from you to you as trustee of the trust. The deed is then recorded with the county recorder or land records office where the property sits. Each county has its own form, notary rules, and recording fee, so check the county's website first.

Before you record, check these three things:

• Your mortgage. Most mortgages have a due-on-sale clause. Federal law (12 U.S.C. § 1701j-3(d)(8)) prevents a lender from calling a loan on a home with fewer than five dwelling units just because you transfer it into a trust where you remain a beneficiary and keep your right to live there. Tell your lender if you want a record of the transfer.
• Title insurance. Ask your title insurer whether the transfer affects your policy and whether it will confirm coverage continues.
• Property tax and transfer tax. Many states treat a transfer into your own revocable trust as a non-sale. California, for example, excludes it from reassessment (Revenue and Taxation Code § 62(d)). The rules and paperwork differ by state, so ask the county assessor or recorder before you file.

An attorney or title company can prepare and record the deed for a modest fee. If you own property in more than one state, you need a deed recorded in each one. That is a common reason to use an attorney.

Step 7: Fund Your Accounts and Update Beneficiaries

Creating the trust is only half the job. A trust controls only what is in it, so every asset you want it to hold must be moved in. The Consumer Financial Protection Bureau notes that a trustee has authority only over assets placed in the trust, not over property left outside it.

Bank and brokerage accounts

Contact each institution and ask to retitle the account in the name of the trust, or to open a new account in the trust's name. Many states, including those that follow the Uniform Trust Code, let you give a bank a short "certification of trust" instead of the full document. It confirms the trust exists and who the trustee is, but does not need to include who inherits what. Ask each institution what it needs, because the requirements vary.

Retirement accounts and life insurance

Do not retitle an IRA, 401(k), or similar account into the trust. The IRS requires an IRA to be set up for the exclusive benefit of you or your beneficiaries, so you generally cannot move ownership to a trust, and taking money out to do so can trigger income tax. Instead, update the beneficiary designation. In most cases that means naming the people you want directly. If you name the trust as beneficiary, the IRS sets conditions for it to qualify for favorable payout rules: the trust must be valid under state law, be irrevocable at your death, have identifiable beneficiaries, and give documentation to the account custodian on time. Get advice before you do this.

For life insurance, name your beneficiary directly in most cases. The proceeds pass outside probate either way.

Vehicles, business interests, and valuables

Some states make retitling a vehicle simple, and others make it a hassle. Check your motor vehicle agency, or use a transfer-on-death registration if your state offers one. For an LLC or partnership interest, read the operating agreement, since it may limit transfers. For jewelry, art, and similar items, a short written assignment that moves them to the trust is the usual method.

Step 8: Sign the Supporting Documents

A trust works best as part of a small set of documents. Most people sign these at the same time:

• A pour-over will. This is a backup will that sends any asset you forgot to fund into the trust at death. It also names a guardian for minor children, which a trust cannot do. See what a pour-over will does.
• A durable power of attorney. It lets someone you trust handle financial matters for assets that are not in the trust. See what a power of attorney is.
• A health care directive or living will. It states your medical wishes. See what a living will is.

If you have minor children, also read about naming a guardian.

Step 9: Tell Your Successor Trustee and Review the Plan

Sit down with your successor trustee and tell them the trust exists, where the documents are, and who your attorney is. You do not need to share every detail of your plan, but they should be able to find the paperwork quickly. Our emergency information list is a good place to record account contacts, passwords, and document locations in one spot.

Review the trust every few years and after any major change: marriage, divorce, a birth, a death, a large inheritance, a move to another state, or a new home. Each new account or property you buy afterward should be titled in the trust from the start, or transferred in soon after.

Common Mistakes to Avoid

Signing the trust and never funding it

This is the most common and most costly error. An unfunded trust does nothing at death, and the assets go through probate as if it did not exist.

Forgetting assets you acquire later

A new house, a new brokerage account, or an inheritance can end up in your own name by default. Retitle it, or the pour-over will has to catch it, and that brings back probate.

Naming a beneficiary who is out of date

Beneficiary forms on retirement accounts and life insurance override your trust and your will. An ex-spouse or a person who has died is a frequent surprise. Review these forms whenever you review the trust.

Assuming the trust saves taxes or shields you from creditors

A revocable trust does neither. Because you keep the power to revoke it, federal law includes the property in your taxable estate (26 U.S.C. § 2038), and under the Uniform Trust Code creditors can still reach it while you are alive. For deaths in 2026, the IRS filing threshold for the federal estate tax is $15 million, and some states set their own, lower thresholds. See whether your estate pays taxes.

Leaving the successor trustee in the dark

If no one knows the trust exists, the family may start probate anyway. Make sure the people who will act know where to look.

Frequently Asked Questions