What property should go in a living trust?

A living trust is a legal document in which your assets or wealth are put into a trust for your benefit during your lifetime. You designate the beneficiaries to which the trust will be transferred upon your death and name a representative — a “successor trustee” — who will take over the management of your trust should you become mentally incompetent or in the event of your death. If the living trust is revocable, you have the option of making changes to it during your lifetime.

One of the benefits of setting up a living trust is that your family members won’t have to go through the hassle and time involved with probate. This means a faster transfer of your assets to your beneficiaries once the successor trustee pays all outstanding bills and settles your debts. In addition, a living trust isn’t made public; in other words, your estate will be distributed in private.

Once you’ve created and signed your living trust, it needs to be “funded” with your assets. Funding a trust is the process of transferring your assets from you to your living trust. In order to do this, you’ll need to change the titles of your assets from your name to the name of your trust. Beneficiary designations will also need to be changed to your trust.

What things can you include in your living trust?

Specifics

The types of assets that can be retitled into the name of your living trust include:

  • Cash accounts — includes checking, savings, money markets, CD’s, safe deposit boxes
  • Non-retirement investments and brokerage accounts
  • Non-qualified annuities
  • Stocks and bonds held in certificate form
  • Tangible personal property
  • Business interests and intellectual property
  • Life insurance
  • Note payable
  • Royalties, copyrights, trademarks, and patents
  • Oil, gas, and mineral rights
  • Real estate

There are some assets you may not want to place in a living trust such as IRA’s and other tax-deferred retirement accounts, incentive stock options and Section 1244 stock, and interests in professional corporations.

Get answers to the rest of your living trust questions

A living trust is a great vehicle for the majority of your assets. However, there are certain assets or situations in which it’s best to leave an asset out of the trust. That’s why working with an attorney who is experienced in the field of trust and estate planning is crucial to ensure that your assets are kept safe and are distributed according to your wishes.

If you live in the San Diego area and want to speak with a living trust attorney, The Law Office of David W. Foley, California Living Trusts, has answers to all your living trust questions as well as other estate planning questions. At The Law Office of David W. Foley, we specialize in creating trusts as part of an estate plan for our San Diego clients.

Contact our office to schedule an appointment with one of our estate planning attorneys.

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