Make a Living Trust: A Quick Checklist

When planning your estate, one of the biggest decisions you'll make is whether to use a will, a living trust, or both.

“Although everyone should have a will, not everyone needs a trust,” advises Navy Federal Credit Union. “While they share some similarities, wills and trusts play distinct roles in ensuring your wishes are met.”

A will goes into effect only after you die and in most instances, it must go through probate, which can delay distribution and increase costs.

“We’ve all heard stories about how long the courts can tie up an estate in probate or the potential for high costs and professional fees,” says TIAA.

A living trust, by contrast, takes effect as soon as it is created and funded, offering privacy and potentially smoother asset transfers.

Creating a living trust can be an effective way to manage your assets during your lifetime and ensure they’re distributed according to your wishes after death.

Unlike a will, a living trust can help your beneficiaries avoid the lengthy and expensive probate process. Here's a practical checklist to guide you through establishing your living trust.

Before You Begin

• Determine if a living trust is right for you. Living trusts work best for people with substantial assets, multiple properties, or complex family situations. If you have a simple estate, a basic will might suffice.
• Understand the costs involved. While you can create a living trust yourself, many people benefit from professional legal guidance, especially for complex situations.

Essential Steps to Create Your Living Trust

Step 1: Choose Your Trust Type

• Revocable living trust: Can be modified or revoked during your lifetime (most common).
• Irrevocable living trust: Cannot be changed once established but offers certain tax advantages.

Step 2: Select Your Roles

• Grantor/Settlor: You, the person creating the trust.
• Trustee: Often yourself initially, manages the trust assets.
• Successor trustee: Takes over when you become incapacitated or die.
• Beneficiaries: People or organizations who will receive the trust assets.

Step 3: Inventory Your Assets

Create a comprehensive list of what you want to include:

• Real estate properties.
• Bank accounts and investments.
• Business interests.
• Valuable personal property.
• Life insurance policies (if applicable).

Step 4: Draft the Trust Document

Your trust document should specify:

• How assets should be managed during your lifetime.
• Distribution instructions upon your death.
• Powers granted to the trustee.
• Provisions for incapacity.
• Instructions for minor beneficiaries.

Step 5: Execute the Document Properly

• Sign the trust document according to your state’s requirements.
• Have it notarized (required in most states).
• Consider having witnesses if required in your state.

Step 6: Fund the Trust

This crucial step involves transferring ownership of your assets to the trust:

• Real estate: Prepare and record new deeds.
• Bank accounts: Contact your bank to retitle accounts.
• Investment accounts: Work with your broker or financial advisor.
• Personal property: Update titles and registrations as needed.

Many people create a trust but forget to transfer their assets into it — essentially leaving it empty. Common mistakes include:

• Not retitling vehicles or real estate
• Forgetting to update beneficiary designations on retirement accounts or life insurance
• Assuming personal property is automatically included

Tip: Work with your attorney to draft assignment documents for personal property and create a schedule of assets to attach to your trust.

Planning for Incapacity

One of the lesser-known benefits of a living trust is that it provides continuity in case of mental or physical incapacity.

If you become unable to manage your affairs, your successor trustee can step in immediately to handle your assets according to your instructions — without the need for court intervention. This can be a huge relief to family members during a difficult time.

As far as healthcare, a medical power of attorney, also known as a durable power of attorney for health care proxy, is a legal document that allows you to appoint someone to make medical decisions for you if you are unable to do so yourself.

“Advance care planning involves discussing and preparing for the future decisions about your medical care if you become seriously ill or unable to communicate your wishes,” says the National Institute on Aging.

In Texas you can also have a living will or “directive to physicians and family or surrogates” which can tell doctors how you want to be treated if you cannot make your own decisions about emergency treatment.

Professional Guidance

While this checklist provides a framework, creating a living trust involves complex legal and financial considerations. Consider consulting with an estate planning attorney, especially if you have:

• Substantial assets or complex financial situations
• Business ownership interests
• Blended family dynamics
• Concerns about incapacity planning
• Questions about tax implications

A properly established and funded living trust can provide peace of mind and significant benefits for your beneficiaries. Take time to understand your options and ensure your trust meets your specific needs and goals.

Get Started with Sloan Docs

Ready to create your own living trust or other essential estate planning documents — without the high legal fees?

Sloan Docs offers easy-to-use, attorney-drafted templates for your basic family and personal legal needs. Whether you're looking for a personal will, revocable trust, or a complete estate planning package, Sloan Docs gives you everything you need to do it yourself — safely, securely, and affordably.

Powered by Rally Legal, our platform ensures a smooth, guided experience you can complete on your schedule, from the comfort of home.

• Simple templates
• One affordable price
• Secure, guided experience
• No hidden fees or upsells

Take control of your future — contact Sloan Docs and get started today.