How to Set Up a Trust Fund

Introduction

• Trust issues joke: Importance of setting up a trust fund.
• Establishing a trust fund is simple and essential for everyone.

Why Start a Trust Fund?

• Quote by Benjamin Franklin: "The only things certain in life are death and taxes".
• Death is a critical reason to organize and manage your assets.
• Common Misconception: Only rich people need trust funds.
• Reality: Everyone should have a plan for their assets, regardless of wealth.
• Trust funds help prevent family disputes over assets after death.

What is a Trust Fund?

• A trust fund is a legal document deciding the fate of your assets after death.
• Consider all your assets: Cars, home equity, bank accounts, retirement accounts, electronic devices, etc.
• Revocable Living Trust: You can decide what happens to your property when you are no longer here.
  • Can give to children, donate, give to friends, or whomever you choose.

Consequences of Not Having a Trust or Will

• The state decides how your property is distributed, which may cause disputes among heirs.
• The risk of family conflicts increases without clear instructions.

Key Terms in a Trust Fund

• Determine the Beneficiaries: Trust can be a beneficiary of rental property, primary home, investment accounts, businesses, etc.
• Funding the Trust: Decide which assets the trust fund will manage.
• Set Conditions: You can specify terms for inheritance (e.g., age, education, specific actions).
  • Example: Inheriting a business at age 30 with a degree.
  • Example: Receiving stocks after passing drug tests and completing therapy.

Creating the Legal Document

• Two Options: DIY or hire an attorney.
  • DIY: Cheaper, using websites like lawdepot.com or nolo.com.
  • Attorney: Saves time, provides expert advice, possibly offering tips & tricks.

Appointing a Trustee

• Role of the Trustee: Manages the trust and ensures assets are distributed per the trust's terms.
  • You are the trustee while alive.
  • After death, a primary beneficiary (e.g., spouse, oldest child) typically becomes the trustee.

Executing the Trust

• Legal Execution: Trust must be signed in front of a public notary and a witness (cannot be a beneficiary).
  • Ensures the trust is legally binding and avoids biases in case of disputes.

Trust vs. Will

• Both instruments: Ensure assets go where you want after death.
• Request for More Information: Potential future video comparing trust funds and wills.

Conclusion

• Encouragement to watch additional content for deeper understanding.
• Reminder to discuss or comment for further video requests.