Neuberger, Griggs, Sweet & Froehle, LLP

Future Financial Security: How to Set Up a Trust Fund in 7 Simple Steps

In the United States, less than 2% of the population receives a funds by a trust designation. 

Typically trust funds are inherited by the children when a parent dies.  

Passing down your money and property can be a difficult thing to deal with. However, preparing for this step can help you manage where it all goes and how you can help others. 

Continue reading to discover how to set up a trust fund in 7 simple steps! 

1. Choose Your Trust Fund 

There are a variety of trust funds that you will have to choose in the beginning stages of learning how to set up a trust. 

Revocable trusts allow you to control all of the assets and can make changes at any time. Irrevocable trusts happen when you give control of assets to a beneficiary. Other common trusts can be for educational purposes only while others can help people with disabilities.

Think about the purpose of your trust fund during this stage and consider charities during this step.

2. Select a Trustee

The trustee of your trust fund is the person that you will appoint to have power over your assets.

Some people use financial institutions as a trustee. Most people, however, assign a trusted friend or family member as the trustee. Whoever the trustee is, they will have power over your assets. They must be a person that you can rely on to make payments and help others, if necessary. 

If you don’t have a strong relationship with someone or can’t rely on them with basic responsibilities, you should look for another option. Some people use their attorneys to help find a trustee that can pursue your wishes. 

3. Include What’s Necessary

After you have identified the correct type of trust fund for your assets, you must write down a couple of details.

For a trust fund to work, you will need a trust creator, which is typically your role. You will also need to identify the property and assets in the trust along with the beneficiaries. This part will help family members get exactly what you intended them to. 

Throughout all of this, you will need a trustee to administer the entire process. You can take on this role for the remainder of your life or appoint someone else. Typically the person you appoint can only execute your wishes once you’ve passed away or become incapacitated.  

It is important to keep in mind that the distribution of your assets will depend on your spouse and children. 

4. Solidify the Details and Make It Official

Figuring out the details mentioned above may take some time, especially if you have never considered them in the past. 

After you have identified who will get what once you pass on, you will have to make it official. Typically a professional estate or trust attorney delegate this process. Our company has a team of excellent attorneys that can help you in the Wisconsin area. 

Finding a local attorney is crucial because they are well versed in local and state laws. With an attorney by your side, your trust fund can be completed. 

5. Put Away Your Money 

Now that you’ve gotten the details finalized, you can begin putting your money where your mouth is.

For someone to inherit wealth from a trust fund, there must be funds available. You can take your documents to a financial business or trust fund bank account. You can either deposit money into the fund over time or put a lot of money away at once. 

When putting away your money you should also consider your retirement plans. Overlooking retirement may leave you short on money in the future. Talking with your attorney can help you determine the best funding method for your lifestyle. 

6. Register With the IRS

Putting your money into an account will require a bit more documentation.

When you put money into an account, you must register it for tax reasons. Some trust funds that you create will need to have a unique taxpayer identification number. You must have this when filing taxes and taking care of legal work. 

7. Talk With Your Trustee

Throughout the process of setting up a trust fund and even beyond, you should be communicating with your assigned trustee.

Talking with your trustee can help them get a better understanding of your wishes and what you want your assets to go towards. Having an honest relationship is important if you don’t want your money and property to go elsewhere. 

After a death, handling wills and trust fund information can become overwhelming. Talking to your trustee beforehand can also enlighten them as to how the process works and what is expected of them. Helping your trustee along the way is recommended for smooth transitions during tough times.  

Learning How to Set up a Trust Fund Is Easy 

There will come a point in time when your children will inherit your money.

Learning how to set up a trust fund now can ensure that they receive the money and you know exactly where it is going. 

If you have property or money that you want to give to charities or family members, you must appoint a trustee to carry out your wishes. Typically, trustees consist of family members and trusted friends. You should talk to them about what is expected of them and where you want your assets to go. 

Don’t be afraid to get guidance from an attorney. They can help make this process go by quickly and stress-free.  

Be sure to check out our blog and contact us for all of your legal needs in the future! 

The materials on this website are provided for informational purposes only and do not constitute legal advice. These materials are intended, but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as an indication of future results. Transmission of the information is not intended to create, and the receipt does not constitute, an attorney-client relationship between sender and receiver. You should not act or rely on any information contained in this website without first seeking the advice of an attorney.


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