Sunday, January 13, 2008

How to Make an Irrevocable Trust


An irrevocable trust is an estate-planning tool that allows you to control your assets, provide for your heirs and sidestep some estate and income taxes. Engaging legal counsel to help prepare these documents is recommended, although you may be able to make your own irrevocable trust by following these simple steps.


Difficulty: Moderate

Things You'll Need

  • Irrevocable trust forms
  • List of assets
  • Beneficiaries
  • Lawyer
  • Notary public



Step One

Make a list of your assets and the individuals you would like to receive your property upon your death or incapacitation. Keep in mind that once you make an irrevocable trust, it cannot be changed.

Step Two

Obtain the necessary forms to make your irrevocable trust from an attorney, a qualified trust preparer, a paralegal or on the Internet at websites, such as Seek legal assistance if you need help completing the forms

Step Three

Prepare your irrevocable trust to provide for your minor and adult children, grandchildren and any developmentally handicapped heirs.

Step Four

Take advantage of making an irrevocable trust to exclude unwanted individuals from staking a claim to your estate.

Step Five

Study your local, state and county laws governing trusts. You may have to complete state-specific documents when preparing yours.

Step Six

Abide by Internal Revenue Service code regulations if you are making an irrevocable trust to avoid estate and/or income taxes. When that is the case, you (the individual establishing the trust) can't have any power or control—direct or indirect—over the property or income of the trust. Obtain a tax exemption form from the county assessor's office in the county where the property is located.

Step Seven

Verify what must be done to "fund" your trust, including transferring property ownership, deeds and financial accounts.

Step Eight

Have your documents notarized and/or witnessed and, if necessary, recorded with your local county recorder's office to make them official.

Tips & Warnings

  • An irrevocable trust cannot be amended.
  • Consult an attorney if you have questions or concerns about making an irrevocable trust.
  • A "Medallion Signature Guarantee" might be required when creating your irrevocable trust. Many banks provide a Medallion Signature Guarantee at no charge for their customers. It is different from notarizing a signature, because it guarantees that it is your signature.

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