You Have Your Trust, But Is There Anything In It?

You’ve signed your Trust. Great! But wait, there’s more…

Creating your Trust is just the first step. Upon signing, your Trust is merely an “empty bucket.” Funding your Trust, means filling the “empty bucket” with your assets. Your assets fill the “empty bucket” by being retitled in the name of your Trust. Simply signing your Trust does automatically re-title assets. The benefit of placing assets in your Trust is that upon your death, your family avoids having to open a probate estate. With your assets in Trust, there will be nothing for the Court to have control over.

You need to first talk with your attorney to decide which assets will be retitled in the name of your Trust. There are various reasons (mainly tax issues) why you wouldn’t title an asset in the name of your Trust. Once you have decided what assets to put into your Trust, you need to complete the proper paperwork. Furthermore, as long as you are trustee of your Trust, any assets in your Trust are still under your complete control. You can move assets, sell assets, withdraw assets that are in your Trust.

It is also important to make sure your attorney has drafted a Pour-Over Will. If you forget to retitle any assets in your Trust, the Will will “pour-over” any assets not in Trust into your Trust. Probate may be involved in this situation, but generally can be handled in a quicker and more efficient manner.

You also want to consider if your Trust should be the beneficiary of any of your assets, including life insurance. Again, this is a discussion you should have with your attorney. Taxes, as well as the liquidity of your Trust upon your death are some important considerations.

What about property that does not have paperwork, like jewelry or artwork? Those assets can also be funded in your Trust by an assignment prepared by your attorney. Once those assets are placed in Trust, your Trust controls their disposition upon your death. It may seem odd to “put” personal property in your Trust, but certain items can be valuable and depending on the value may necessitate the need for a probate estate if they are not in Trust.

Congratulations again on taking the first step, but do not forget the next critical step in the estate planning process. Please feel free to contact our office today for a free one-hour consultation on any estate planning matters.