Many individuals assume that you need to have significant wealth to fund a trust. While that may be the case with some trusts, that’s unnecessary if you plan to set up a living trust.
Several factors may motivate an individual to set up a revocable trust. You may want to apprise yourself of what those are and how to best fund a living trust.
Why might you want to set up a revocable living trust?
Like most trusts, individuals set up living trusts because they have something valuable, whether it’s property, money or other assets that they want to protect from potential creditors for their loved ones’ future use. Placing assets in a trust helps avoid the probate process, allows for the more seamless transfer of property and affords trustors many tax-savings benefits.
Most living trusts are revocable. The revocability allows people to add and remove assets throughout their life.
Which assets should you use to fund a living trust?
You can place any number of assets, including an insurance policy, jewelry, bank accounts or investment portfolio into a living trust. Some individuals may fund their living trust with vacation homes, intellectual property rights or foreign assets. It’s unnecessary for you to currently possess the title or deed to property to place it into the trust. You can sign an assignment allowing you to fund the trust with it.
Deciding whether a living trust is ideal for you
An estate planning attorney can advise you of the pros and cons associated with different types of trusts. This knowledge may allow you to make an informed decision regarding which one might be suitable for you and your situation.