How to Set Up a Living Trust: A Step-by-Step Guide
Key takeaways
- A revocable living trust lets your assets pass to beneficiaries without probate, while you keep full control during your lifetime.
- Setting one up has two halves: creating the trust document, and funding it by retitling your assets into the trust. The second half is the one people skip.
- You can use an online service ($100–$400) for a simple estate or an attorney ($1,500–$5,000+) for a complex one.
- Pair the trust with a pour-over will and keep your retirement and insurance beneficiary designations up to date.
A revocable living trust is one of the most useful estate planning tools available. It holds your assets during your lifetime with you in full control, then passes them to your beneficiaries at death without going through probate court. Setting one up is very doable, but it involves more than signing a document. The step that actually makes a trust work, funding it, is the one most people overlook.
At a high level, you decide how the trust should be structured, draft and sign the trust document, and then transfer ownership of your assets into the trust. This guide walks through all eight steps in order, explains funding in detail, covers what it costs, and flags the mistakes that quietly cause trusts to fail. For background on whether a trust is right for you, see our comparison of a will versus a living trust.
What to Decide First
Before drafting anything, get clear on a few decisions that shape the whole trust. Know roughly what you own and how each asset is titled, since that determines what you will move into the trust. Decide who you want to inherit and whether you want them to receive their share outright or over time. And identify the people you trust to step in: your successor trustee (who manages the trust if you die or become incapacitated) and your beneficiaries. Having these answers ready makes the rest of the process fast.
How to Set Up a Living Trust in 8 Steps
Choose the type of trust
If you are single, you will create an individual trust. If you are married, you can each create separate trusts or share one joint trust. Joint trusts are simpler to administer and common in community property states; separate trusts offer more flexibility when each spouse has significant separate property or children from a prior relationship. Decide which fits your situation before drafting.
Choose your trustee and successor trustee
With a revocable living trust, you serve as the trustee during your lifetime, so you keep complete control of your assets. The key decision is your successor trustee, the person who takes over if you die or become incapacitated. Choose someone organized and trustworthy, name at least one backup, and make sure they are willing to serve.
Name your beneficiaries
Decide who receives the trust assets and on what terms. You can leave assets outright, split them by percentage, or hold a beneficiary’s share in trust until they reach a certain age or milestone. Naming alternate beneficiaries is wise in case someone predeceases you. This flexibility is a major advantage of a trust over a basic will.
Create the trust document
Now draft the trust. For a straightforward estate, a reputable online service such as Trust & Will or LegalZoom produces a valid revocable living trust for a few hundred dollars. For larger estates, blended families, business interests, or a beneficiary with special needs, work with an estate planning attorney who can tailor the terms and avoid costly errors.
Sign and notarize the trust
Sign the completed trust document, which in nearly all states must be notarized to be valid. Many people also prepare a certificate of trust, a short summary that banks and other institutions accept as proof of the trust without revealing its full contents. Follow your state’s exact signing requirements.
Fund the trust
This is the step that makes everything else work. Funding means transferring ownership of your assets into the trust: recording a new deed to move real estate into the trust’s name, and changing the owner on bank and brokerage accounts to the trust. An unfunded trust controls nothing and avoids no probate. We cover this in detail in the next section.
Add a pour-over will and update beneficiaries
Create a pour-over will as a safety net: it directs any asset you did not move into the trust to pass into it at death, and it is the only place you can name a guardian for minor children. At the same time, confirm the beneficiary designations on your retirement accounts and life insurance, since those pass outside the trust and override anything your trust says.
Store it and keep it updated
Keep the signed trust, certificate of trust, and pour-over will somewhere safe and accessible, and tell your successor trustee where to find them. Going forward, title new real estate and major accounts in the trust’s name as you acquire them so the trust stays fully funded over time.
Dana and Paul, a married couple in Arizona, create a joint revocable living trust online for $350. They name each other as co-trustees and their daughter as successor trustee. They record a new deed moving their home into the trust, retitle their joint brokerage account, sign a pour-over will each, and confirm their IRAs name each other as beneficiary. The whole project takes a few evenings. Because they actually funded the trust, when Paul later passes, Dana administers everything without probate.
Funding the Trust (the Step People Skip)
Creating the trust document is only half the job; an unfunded trust is just paper. Funding is how assets actually become owned by the trust, and it varies by asset type.
Real estate is moved in by preparing and recording a new deed transferring the property from you personally to you as trustee of the trust, filed with the county recorder. Bank and brokerage accounts are retitled by working with each institution to change the account owner to the trust, or by adding the trust as owner. Business interests such as LLC membership units can be assigned to the trust. Retirement accounts (401(k)s, IRAs) are generally not retitled into a trust because that can trigger taxes; instead you keep them in your name and use beneficiary designations.
Signing the trust and never funding it. Any asset left in your own name, not the trust’s, can still go through probate, defeating the main reason you set up the trust. Make a checklist of every asset and confirm each one is retitled.
What It Costs
| Route | Typical cost | Best for |
|---|---|---|
| Online / DIY service | $100 to $400 | Straightforward estates, single state, simple family situation |
| Estate planning attorney | $1,500 to $5,000+ | Larger estates, blended families, business owners, special needs planning |
| Funding costs (either route) | $25 to several hundred per property | Deed recording fees; account retitling is usually free |
The upfront cost is higher than a basic will, but for estates with real estate the probate savings usually more than pay for it. See our guide on how to avoid probate for the bigger picture.
Common Mistakes to Avoid
Not funding the trust. The number one error, covered above. A trust only works for assets actually titled in it.
Skipping the pour-over will. Without it, anything you forget to transfer can pass under intestacy law, and you lose the only way to name a guardian for minor children.
Retitling retirement accounts into the trust. This can create unintended tax consequences. Use beneficiary designations for those instead.
Forgetting new assets. A trust funded once and never updated slowly falls out of date. Title new property and accounts in the trust as you go.
Letting beneficiary forms conflict. Beneficiary designations override your trust, so review them so they tell a consistent story.
Frequently Asked Questions
How much does it cost to set up a living trust?
An online living trust typically costs $100 to $400, while an estate planning attorney usually charges $1,500 to $5,000 or more depending on complexity and your state. Funding the trust adds recording fees of roughly $25 to several hundred dollars per property.
Can I set up a living trust myself?
Yes. You can create a valid revocable living trust using a reputable online service for a straightforward estate. An attorney is recommended for larger estates, blended families, business interests, or a beneficiary with special needs.
What does it mean to fund a living trust?
Funding means transferring ownership of your assets into the trust by retitling them, for example recording a new deed for real estate or changing the owner on bank and brokerage accounts. A trust that is not funded does not avoid probate.
What assets should go into a living trust?
Real estate, bank and brokerage accounts, and business interests are commonly placed in a living trust. Retirement accounts are usually left out and handled by beneficiary designations, and vehicles are often left out for simplicity.
Do I still need a will if I have a living trust?
Yes. You should have a pour-over will alongside your trust to catch any assets you did not transfer into it, and, for parents, because a will is the only document that can name a guardian for minor children.
Does a living trust avoid probate?
Yes, for assets that are properly titled in the trust. Those assets pass to your beneficiaries through your successor trustee without probate. Any asset left out of the trust may still go through probate.
Can I change or cancel a living trust after setting it up?
Yes. A revocable living trust can be amended, restated, or revoked at any time during your lifetime while you are mentally competent. It becomes irrevocable only at your death.