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A Step-By-Step Guide On How To Set Up A Trust Fund

Trust Fund

Want to secure the future of your loved ones? Then, creating a trust fund is a great way to transfer property or assets to your dear ones. It also strengthens your financial planning, ensuring your assets are secured.

Similar to a will, it is a tool outlining how your assets must be tackled once you pass away. Moreover, creating a trust fund is not just for the rich. Anyone looking to secure their assets can do this.

Lastly, having a fund ensures saving on estate taxes, avoiding probate, and saving time, paperwork, and money. This blog discusses a trust fund and how you can set it up.

Trust Fund: What Is It All About?

It is a tool in estate planning that helps in transferring property or assets from one single party to another. Trust fund content can be anything from cash to real estate to cars or even jewelry. While the creator or grantor of the fund is enlivening, it is taking care of the asset for others. 

Once they pass away, control of the trust fund goes to the trustee. They are neutral third parties with no interest in its content. Trust funds have strict rules around them, like transferring them to the beneficiaries once they reach a certain age. It can be any rule.

How Do I Create A Trust Fund? A Step-By-Step Guide

Step 1: Select from multiple categories of trusts.

There are multiple types of funds, and before you decide on setting up a trust fund,  you should know what purpose they serve. For instance, there might be revocable living trusts, testamentary trusts, and more. There are specific types of trust, too, like these:

  • Education Trust: They specify that the funds will encompass academic expenses.
  • Spendthrift Trust: Such funds have limitations on how a beneficiary can utilize their funds and how to distribute them.
  • Special Needs Trust: It belongs to the funds that help in allocating an income or inheritance to disabled people. 
  • Charity Trust: The trust funds are charity gifts.

Find out the primary purpose you would like to serve, and then choose the fund type.

Step 2: Outlining the trust details

Outlining the details requires creating four elements of the trust fund, which you have to set. Here is a breakdown of these:

  • Grantor: The individual whose name is on the fund (who is creating it).
  • Beneficiary: One or more individuals or charities dedicated to receiving the trust contents.
  • Assets and Property: Contents inside your trust fund that will go to the beneficiaries
  • Trustee: He or she is the fiduciary for your fund and is responsible for carrying out the grantor’s desires. He can himself become the grantor when he isn’t dead. But, they should appoint someone to handle the trust if the grantor becomes incapacitated or dies.

After choosing the accurate fund type, record the assets you will put in the fund. Also, know how to manage and distribute the assets and who will be the trustee and beneficiaries.

Step 3: Officialize Your Trust

Making the trust official is the next step. It is better to ask for help from an expert estate planning attorney. Seek recommendations from family or even a financial advisor. But do not trust DIY trust fund websites because they are usually unsafe.

There are attorneys, too, who are familiar with trust laws and can help you make them official. Just remember to check their feed and reviews. It will help you choose the best lawyer to help make the trust official.

The person you choose to make the trust official will declare the trust, deed, and trust instrument. All these help formalize the trust details you have provided. Once you are done documenting the trust, make sure to sign it in a notary’s presence.

Step 4: Fund Adequately

After creating the trust fund, it is time to start funding it with your assets. For this, take your documents regarding the trust to a financial institution or bank and make a bank account using a similar name present in the fund. You will have to give the name and contact details of the trustee to the bank. You have two options to fund the trust: pay in lump sums or over time. In time, the fund will have a few assets and a new owner

Step 5: Listing your trust fund.

Once you have set up your fund, register it with the tax-governing body in your country for tax-related discussions. Every trust fund requires a TIN or taxpayer identification number for financial accounts, tax returns, and more. Talk to a CA or a financial advisor to learn how to register the tax fund.


A trust fund is a step towards creating a strong estate plan to ensure your family is financially secure after passing. There is more to estate planning than having a fund, like a will, a funeral plan, and more. Talk to your attorney now, create a trust fund today, and talk about other financial security planning.

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Barsha Bhattacharya

Barsha Bhattacharya is a senior content writing executive. As a marketing enthusiast and professional for the past 4 years, writing is new to Barsha. And she is loving every bit of it. Her niches are marketing, lifestyle, wellness, travel and entertainment. Apart from writing, Barsha loves to travel, binge-watch, research conspiracy theories, Instagram and overthink.

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