HOW TO FUND A TRUST AND ENSURE THAT ASSETS ARE TRANSFERRED
July 16, 2018
Creating a trust can be a smart move for anyone in California who has assets they want to protect and pass on to designated beneficiaries in a way that offers protections against probate and certain taxes. After a trust is set up, the next step is to ensure it's sufficiently funded. Real estate can be handled with a deed or deed in trust that transfers a property to the established trust. It's often advisable for trust holders to determine if it's necessary to re-file with the county auditor's office to benefit from tax exemptions.
Another aspect of trusts and trust administration is the transfer of personal property. This typically includes furniture, appliances, collectibles and other items with value or sentimental meaning. An attorney may suggest funding a trust that contains these types of items with an assignment or bill of sale. Such documentation clearly indicates that personal property is being assigned to the trust.
If an assignment is the preferred type of documentation, it's meant to be used for items that do not have a title, which would include things like knickknacks and household furniture. With bank accounts, a certificate of trust or affidavit of trust is typically presented to the bank. The designated trustee would then have to sign a new signature card. A trust can also include investment accounts, stocks and bonds and individual securities. Investment advisors may need to provide the proper documentation for assets of this nature.
During the planning process, an estate planning attorney can go over what a client wants to include in the trust and discuss what steps may need to be taken with those assets. Should a trust not be properly funded after the trust holder passes, a lawyer may be able to use a pour-over will to place assets into a trust. However, this option may not guarantee probate is avoided.
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