How to add assets to your living trust

By establishing a revocable living trust, you can pass your assets on to your loved ones without having to go through the delay, hassle, and stress of probate court. However, if you set up your living trust without “funding” or adding any assets to it, it may not be legally valid.

A schedule of your assets needs to be included with your trust documents and should list the assets that you have put into the trust. By transferring assets into a living trust, you are changing the legal ownership from your name to that of the trust. With a revocable living trust, you name yourself as the trustee and will remain in control of your assets. 

Once you set up your revocable living trust and have funded it, you want to consider reviewing trust assets whenever your circumstances change or as laws are changed or updated. In general, it’s a good idea to schedule updates to your trust every three to five years

The process of adding assets to your living trust depends upon the type of asset that you’re transferring. The four categories of assets that you may transfer into your living trust are real property, tangible personal property, financial instruments, and cash accounts. For each type of asset, there is a slightly different process for how to add assets to your living trust.

Updating your records

Included in real property is your home, your vacation home, if applicable, any rental properties you may own, and other real estate. To add real property to your living trust requires transferring ownership from yourself to the trustee. This is done by updating your deed(s) so that it includes your name and lists you as the trustee; for example, “John Doe, Trustee for the Doe Living Trust.”

Tangible personal property includes your car, furniture, boat, jewelry, art, antiques, coin collections, and other personal property. In the case of a car or a boat, for example, you may be able to change the title from your personal ownership to the trust’s ownership. However, for property such as art, jewelry, or antiques, for example, you need to create a written inventory of those particular goods as part of the schedule of your assets.

In the case of financial investments, such as stocks and bonds of both privately and publicly traded companies, you are required to change the documents to reflect moving them into the trust in accordance with the rules of your brokerage account or the individual organization. Notarization is typically involved.

Different banks have different procedures for transferring cash accounts, including checking and savings accounts, CD’s, and money market accounts. Therefore, you’ll need to check with your financial institution as to how they handle the transfer of assets into a living trust.

Don’t wait too long to make additions

Adding assets to your living trust will ensure that it is properly funded so that it can do what you intended it to do. But, what happens to property not in a trust at the time of your death? Creating a pour over will indicate that any items left in your name at the time of your death are to be transferred to that trust.

The Law Office of David W. Foley, San Diego living trust attorney, can help you create a living trust as part of your estate plan as well as a pour-over will. Contact our office to schedule a free consultation.

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