A revocable trust, often referred to as a living trust, is a valuable estate planning tool that allows you to manage and distribute your assets during your lifetime and after your passing while avoiding the probate process. However, simply creating a revocable trust is not enough; you must also fund it properly to reap its full benefits.
To ensure you complete every necessary step of the trust process, speak with our Lafayette, CA estate planning attorneys.
What is Funding a Revocable Trust?
Funding a revocable trust means transferring ownership of your assets from your name into the trust’s name. This process involves re-registering accounts, changing titles, and updating beneficiary designations to reflect the trust as the owner or beneficiary. The goal is to ensure that the trust legally owns or controls your assets, making them subject to the trust’s terms and avoiding probate upon your passing.
Common Assets to Fund into a Revocable Trust
- Real Estate - Transfer the titles of your real estate, such as your primary residence, vacation homes, or investment properties, into the name of your trust.
- Bank and Investment Accounts - Re-register your bank accounts, certificates of deposit (CDs), brokerage accounts, and other financial assets in the name of the trust.
- Vehicles - If your trust owns vehicles, update the vehicle titles accordingly. Keep in mind that some states have specific rules and forms for this process.
- Business Interests - If you own a business, you can transfer your ownership interest into the trust, ensuring smooth succession planning.
- Personal Property - While it may not be necessary to fund all personal property into the trust, high-value items like art, collectibles, and jewelry can be included.
Why Proper Funding is Important
One of the primary benefits of a revocable trust is avoiding probate, which can be costly, time-consuming, and public. Proper funding ensures that your assets pass directly to your chosen beneficiaries outside of the probate process.
Funding the trust also allows for seamless management of your assets during your lifetime and in case of incapacity. Successor trustees can step in to manage trust assets if you become unable to do so.
Unlike probate proceedings, which are public records, the administration of a trust typically remains private. Properly funded trusts help maintain your and your beneficiaries’ privacy.
By funding your trust, you ensure that your estate plan aligns with your intentions. Assets that are not properly funded could inadvertently end up outside the trust, potentially undermining your wishes.
Regular Review and Trust Maintenance
It’s important to note that funding a revocable trust is an ongoing process. As your financial situation changes, you should continually review and update the trust to include newly acquired assets.
Discuss Your Trust With an Experienced Lafayette Estate Planning Attorney
Work with an experienced estate planning attorney from Pedder Hesseltine Walker & Toth to ensure that your trust remains aligned with your goals and that your asset titling is consistent with the trust’s terms. Proper funding and maintenance are critical to maximizing the benefits of your revocable trust and achieving your estate planning objectives.
Contact us to ensure you have an airtight and effective estate plan.
