A trust is an estate planning tool that makes it easier for you to pass assets down to your heirs. When you create a trust, you can place stipulations on who will receive the assets and when they will get them. One thing that you must remember, however, is that trusts have to be funded in order to work.
The process of funding the trust is one that has some people mystified. When you fund the trust, you get the title to the property in the trust put into the trust’s name instead of your name. This puts the trust in charge of the asset.
What happens if there isn’t a title to the asset?
Some items, such as family heirlooms and estate jewelry, don’t have titles or deeds that can be transferred to the trust. In those cases, there must be an Assignment of Property that names the trust as the owner of the items. For assets such as bank accounts, the entire account will have to be transferred into one that’s in the trust’s name.
Funding the trust right away is important. If the trust is a revocable living trust that isn’t funded, the assets you intended to go to your loved ones might not make it to them. Anything that’s held outside of the trust will have to be passed out based on the laws governing it. This might mean the right of survivorship laws or the intestate laws, depending on the circumstances.
Working closely with your attorney can help you to determine the most efficient way to pass things to your heirs. Be sure to consider the estate plan in its entirety so you can make decisions that will benefit your loved ones.