How to Create a Trust in a Will
A trust created in a will is known as a testamentary trust.
As you are drafting your will, creating a trust is as easy as stating your intention to do so. To be effective and enforceable, however, you'll have to provide other detailed information to instruct a probate court as to how the trust should operate. Usually testamentary trusts are created so that assets left to a minor child are managed by a professional or adult friend until the child reaches the age of maturity or satisfies some other precondition.
Declare a trust and corpus. Trusts are created by declaration, and must consist of some assets or property. In testamentary trusts, some of the assets are usually bequeathed directly with the remaining "residue" forming the corpus of the trust. In other cases, the trust corpus may include the entire estate as contemplated by this sample trust declaration language: "I direct that upon my death my estate shall devolve upon and be retained and administered by my trustees, who shall stand possessed thereof upon trust for the benefit of my wife."
Name a trustee or trustees. The naming of one or more trustees is essential to the creation of a trust. A trustee is a person who carries out the will of the person who established the trust and works for the good of the trust's beneficiaries. Obviously the trustee in your testamentary trust should be someone expected to outlive you, and you can also name successor trustees to follow that person if they are deceased or unavailable.
Name beneficiaries. The beneficiary or beneficiaries are the final necessary ingredient of the trust. They are the people who will receive the assets directed to them in the trust at the time and in the manner described in the will. Beneficiaries can be described by name or by relationship, such as "my daughter's children" or "my son's wife."
Enumerate powers of the trustee(s). As creator (granter) of the trust, you have complete discretion over the power of the trustee(s). Typically, trustees are authorised to maintain the value of the trust corpus, make investments, improve property, sell assets and pay heirs. The more specifically the trustee's powers are enumerated, the better protection afforded your beneficiaries.
Describe the rights of the beneficiaries. The trust language must specify what rights to assets or property each beneficiary has, and the requisite conditions and manner for them to receive them. A beneficiary can gain assets at a certain age, or upon graduation from a certain school or under virtually any other condition. Also consider language as to what happens to property that never vests in the stated beneficiary.
Unlike living trust, a testamentary trust has no effect until you die. It will also not protect your assets from the probate process, since the will itself must be probated. Nevertheless, the testamentary trust is an effective way to prevent a substantial value of assets passing to a minor child in the case of your death, or for establishing certain preconditions for the child's receipt of certain assets. The creation of a testamentary trust also takes the immediate tax burden off the beneficiaries, though it does not limit estate trust liability.
If your estate is valuable and complex, it's highly recommended you consult a professional estate planning attorney for help drafting your will and testamentary trust.