• (925) 750-7795
  • 5890 Stoneridge Drive, Suite 105,
    Pleasanton, CA 94588

I have signed my estate planning documents what should I do next?

Congratulations on taking the first important steps in preparing your estate. Now that you have signed your  Revocable Trust, the time has come to transfer assets to your trust. This is also referred to as funding a trust and essentially means transferring the ownership of assets from your individual name into the name of your revocable trust.

You may think that you have done everything you need to do once you have created a revocable trust and have all of the supporting documents in place, but this isn’t the end of the story. Funding a trust is the most critical action item in creating your revocable trust.

You should transfer all of your major assets into your revocable trust. An unfunded trust is the equivalent of a treasure chest without any treasures in it. Failure to fund your revocable trust when executing your estate plan can result in your trust being useless and your estate ends up in probate, despite all of your efforts.

Funding Your Revocable Trust

The way you transfer property into your revocable trust will be different depending on the asset being transferred––for real estate, you need to execute a new deed that transfers the property out of your individual name and into the name of the trustees of your revocable trust; for bank accounts you need to re-title the name of the account into the name of your revocable trust; and for personal property and other major assets that don’t have a title, such as jewelry, furniture etc., your attorney can help you transfer these assets by assigning them to your revocable trust.

Case Study: The Smiths

For example, let’s say Mr. and Mrs. Smith established The Smith Revocable Trust. When they established the trust, they owned, amongst other things, a home, a bank account, and an RV.

To transfer those assets into the trust, the Smiths will first need to have a deed re-executed for their home. The new deed will name the trustees of The Smith Revocable Trust as the owner of the home, rather than Mr. or Mrs. Smith.

Next, they will go to the DMV and re-title the RV. The new RV title will name the trustees of The Smith Revocable Trust as the owner of the vehicle, rather than Mr. or Mrs. Smith.

Finally, the Smiths will go to their bank and re-title their bank accounts from their names to the name of the trustees of their revocable trust.

Once these assets are re-titled into the trust, they become assets owned by the trust. But, when they want to sell one of these assets, their home, for example, they simply sell the home and when they purchase another home, they name the trustees of The Smith Revocable Trust on the deed as the owner of the new home. This goes for any new asset that they acquire.

Exceptions

You generally want to change the title to all of your major assets from yourself to the trustees of your revocable trust. There are, however, some assets that are often not transferred into a trust, these are:

  • Cars – usually not transferred into the trust because there is no probate on cars.
  • Retirement Accounts – not be transferred into the trust because retirement accounts don’t go through probate.
  • Annuities – these don’t go into your trust because they pass on by contract.
  • Life Insurance – whether you should transfer your life insurance policy into your revocable trust will depend on the size of your estate and whether or not it will be subject to estate taxes after you die. We can help you determine if you should transfer life insurance to your trust.
  • Checking Accounts – you may want to hold your checking accounts in joint tenancy with your spouse and outside of the trust in order to clear up any debts after the death of the first spouse. Jennifer Martin is here to help you find out if you should transfer your checking account into your trust.

The bottom line is that funding a trust is extremely important. If you don’t transfer your major assets into your revocable trust, they may potentially be subject to probate. And avoiding probate is a primary reason for creating a trust. Jennifer Martin, estate planning attorney, can instruct you on how to transfer your assets into your revocable trust and where possible our office will transfer the assets for you. Our firm assists estate planning clients to prepare all of the deeds and paperwork you need to transfer other assets, such as stocks, bonds, and investment portfolios into your revocable trust.

Let Jarratt Martin Law, LLP help you with your Estate Planning Needs

For more detailed information on funding a trust, contact a Jennifer Martin to schedule your consult. With Jennifer’s help, you will have the peace of mind of knowing that your loved ones will be taken care of when you are no longer able to do so.  You can set up your consult today by calling us at (925) 750-7795.

Leave a Reply

Your email address will not be published.

Time limit is exhausted. Please reload CAPTCHA.