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  • Writer's pictureLeeson & Leeson

A Comprehensive Guide to Setting Up a Family Trust

Setting up a family trust is a thoughtful and strategic financial decision that can provide a wide range of benefits for you and your loved ones. A family trust, also known as a revocable living trust, is a legal entity that holds and manages assets for the benefit of the trust's beneficiaries. In this blog, we'll guide you through the process of establishing a family trust, highlighting its advantages and essential steps.


Understanding Family Trusts:


A family trust is a flexible estate planning tool that allows you to maintain control over your assets while ensuring a smooth transition of wealth to your heirs. Some key features of family trusts include:

  1. Revocability: You retain the ability to modify or dissolve the trust during your lifetime, providing flexibility to adapt to changing circumstances.

  2. Asset Protection: Assets placed in the trust are shielded from probate, potentially reducing estate taxes and avoiding the public scrutiny associated with the probate process.

  3. Privacy: Unlike a will, which becomes a public document upon probate, a family trust allows for a more private transfer of assets as it remains confidential.


Steps to Set Up a Family Trust:


  1. Define Objectives: Clearly articulate the goals and objectives of the family trust. Consider factors such as asset protection, minimizing taxes, and ensuring a seamless transfer of wealth.

  2. Choose a Trustee: Select a trustee, who can be an individual, a group of individuals, or a corporate trustee. This person or entity will be responsible for managing and distributing trust assets according to your wishes.

  3. Create the Trust Document: Draft a comprehensive trust document outlining the terms and conditions of the trust. Specify beneficiaries, trustees, and how assets should be distributed.

  4. Transfer Assets to the Trust: Fund the trust by transferring ownership of your assets into the trust. This may include real estate, bank accounts, investments, and other valuable possessions.

  5. Update Beneficiary Designations: Ensure that beneficiary designations on insurance policies, retirement accounts, and other assets align with the provisions of the trust.

  6. Review and Revise: Regularly review and update the trust document to reflect any changes in your family structure, financial situation, or legal regulations.


Advantages of Family Trusts:


  1. Probate Avoidance: By bypassing probate, a family trust allows for a faster and more private distribution of assets to beneficiaries.

  2. Flexibility: The revocable nature of the trust provides flexibility to adapt to changing circumstances, ensuring that your wishes are always reflected.

  3. Estate Tax Planning: Family trusts can help minimize estate taxes by utilizing exemptions and credits available under tax laws.

  4. Privacy Protection: The confidential nature of trust administration provides a higher level of privacy compared to the probate process.


Setting up a family trust is a proactive step towards securing your family's financial future and ensuring that your wishes are carried out efficiently. Consult with legal and financial professionals to tailor a family trust that aligns with your specific goals and circumstances. Taking the time to establish a well-thought-out family trust can provide peace of mind and a legacy of financial security for generations to come.

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