Full question:
We have a group of friends that would like to establish a 'trust fund' for the daughter of a deceased friend. Her mother is financially irresponsible, and we would like to do this for her future needs like college, wedding, or home. I have been researching this and it seems a little confusing. Will it take hiring an attorney to do this? We would like to save costs and file things ourselves if possible. Any suggestions?
- Category: Trusts
- Date:
- State: Michigan
Answer:
A trust can be created during a person's lifetime or through a will after their death. Once assets are placed in the trust, they belong to the trust and are managed according to the trust document's instructions. A trust is essentially a legal arrangement where one party holds property for the benefit of another. The trustee manages the trust, while the beneficiary receives the benefits.
Creating a trust without an attorney is possible. Here are the basic steps:
Execute a Declaration of Trust. This document outlines the trust's purpose, names the trustees and beneficiaries, details decision-making processes, and specifies the trustees' powers regarding investments and distributions.
Transfer property and assets into the trust. The trust becomes the legal owner of these assets. You can maintain control by appointing yourself as the trustee, along with a trustworthy co-trustee. It's also wise to designate successor trustees in case you or your co-trustee cannot fulfill the duties.
The property placed in the trust must be owned by the principal and can include real estate, personal property, intellectual property, or transferable interests.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.