Creating a living trust will help you in managing your assets and also possibly save money on taxes. The trust is a great way to leave property to your loved ones without subjecting them to the complex probate process. But unless you put property and assets in the trust, it’s basically useless.
Setting up a living trust can be simple, but the process of transferring property in it may require a little more work and understanding. In general, there are a couple of ways in which you can transfer assets to your living trust: through a pour-over will when upon your death or title transfer while you’re still alive.
Funding Your Trust Now
The process of transferring assets to your living trust depends on the type of asset or property you will transfer.
If the asset has a title, then it is the title of that asset that you will transfer. Such assets include real estate, stocks and bonds, automobiles, bank accounts, and non-IRA and non-401(k) investment and brokerage accounts. To transfer the file, you need to change the name of the owner from yours to the name of the trustee.
If the assets don’t carry a title, such as jewelry, furniture, and clothes, then you will transfer the property rights to the trustee. There are intangible interests to these assets such as royalties, intellectual property, ownership interests and other forms of money owed to you.
For assets in which you are a beneficiary, there is a slightly different procedure. To transfer life insurance, retirement accounts, pension plans and health savings account, you have the list the trustee as the beneficiary.
Funding Your Trust After You’re Gone
A pour-over will would allow you to have all your properties transferred to a trust upon your death. Through this will, all the properties and assets that have not been assigned to specific heirs will “pour over” into the trust. However this will not save your loved ones from probate along with the expenses involved in the process since it is a kind of will and would have to go through probate, unlike when you transfer them into the trust while you’re still living.