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Transferring Assets into a Living Trust

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You may have created a living trust, nevertheless, it isn’t useful until the ownership of your assets is transferred into it. Establishing a living trust is the initial phase to getting your assets owned by a revocable living trust. Funding your living trust implies that your assets get transferred into the trust and are formally owned by the trust so it can function as you wished it to.

Changing Ownership of a Trust

When transferring assets to a living trust you are changing ownership, legally, of your assets from your name into that of the trust. A lot of individuals devise a living trust having themselves as their trustee, so you are going to be allowed to use and manage your assets, but they are going to actually be owned by the trust. Remember that items in the trust are going to continue to be associated to your social security number. To begin, you are going to want to compile a complete list of the assets you want transferred so that you are sure you are not missing anything.

Transferring Tangible Property into a Trust

One of the major assets a lot of individuals own is their house and this is probably an asset you wish to transfer into your trust. You can transfer your house (or any tangible property) to the trust using a deed, documentation that transfers ownership into the trust. A quitclaimed deed is the most general and easiest method (and one you can do on your own). Alternately, a warranty deed guarantees you have suitable title when transferring it and might make it simpler for your trust beneficiaries to sell the house in the future.

You are going to want to verify with an attorney about what kind of deed is best in your circumstance. Some states require that every deed be made by an attorney so you might not have a DIY option. After the deed document is made, a real estate deed is required be filed in your county and you are going to need to pay a filing fee.

A deed transference should not impact your mortgage, even when you have a due on sale clause. You need to check on your title insurance, though. You might be able to merely transfer it into the trust, or your title insurance company might require that the trust purchase a new policy.

After the deed is transferred, you may need to change your homeowner’s insurance to denote the trust as owner of the property. Should you get a real estate tax exemption, you are going to want to be sure that is appropriately applied by providing documentation of the trust to the taxing authority, like a certificate of trust.

The Transfer Vehicles into a Trust

To transfer your vehicle(s) into your trust, check if your state permits trust ownership (DMV or attorney). Confirm continued insurance coverage with your insurance company. Obtain a title change document from the DMV, name the trustee as the new owner, and address any sales tax issues with a supervisor if needed. For boat ownership transfer, follow a similar procedure.

Transferring Financial Assets to a Trust

To transfer assets such as investments, bank accounts, or stocks to your living trust, contact the respective institution and complete the required documentation.

You are going to likely need to furnish a document of trust additionally. You might want to keep your personal checking and savings accounts out of the trust for easier use.

Transferring Personal Property to a Trust

Many possessions lack proper titles or paperwork, such as paintings, furniture, and collectibles. Include them in your living trust by listing them on a property schedule in the trust document. Indicate the ownership transfer. If any of these items are insured, ensure the insurance is transferred to the trust’s name as well.

What Cannot Be Placed in a Trust?

Certain items cannot or should not go into your trust, like IRAs which must stay in your name. However, you can designate the trust as a primary or secondary beneficiary. While revocable living trusts are often named beneficiaries for life insurance policies, seek advice from a lawyer or accountant for potential tax implications.

If you acquire or inherit items after creating the trust, transfer them to the trust promptly. When buying new items, act as the trustee to ensure automatic inclusion in the trust. This proactive approach maintains trust integrity and aligns with your estate planning goals.

What About a Pour Over Will?

Enhance protection with a pour-over will, arranged by your attorney. This ensures items in your name transfer to your trust after you pass. Double-check asset transfers for full living trust funding, providing desired protection and overall reassurance.

Source:

  1. Transferring assets into a Living Trust-can you do it yourself? LegalZoom. (n.d.). Retrieved March 2, 2023, from https://www.legalzoom.com/articles/transferring-assets-into-a-living-trust-can-you-do-it-yourself
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