What to do with your living trust
Many people seem to be under the false impression that once a living trust is created, they’re all done. Instead, creating a living trust is simply where you start when it comes to protecting your assets and family from probate. Learn what to do with your living trust after its creation.
Once your attorney has created your living trust, you have reviewed it and are certain that it reflects your wishes, you must fund it for it to have any value.
There are two ways to fund your living trust:
- during your lifetime
- after your demise
Assets are only protected by the living trust if they have been transferred into the trust. The best time to do this is during your lifetime, as it avoids probate completely.
Transferring assets into the name of the trust during the initial trustee’s (you) lifetime is the most common way to fund a revocable living trust. The transfer usually takes place right after the creation of the trust. Even though your assets are owned by the living trust, you still retain all rights to fully manage them from within the living trust even after it has been funded.
The benefit of funding your trust during your lifetime is that you completely avoid probate, except for any property you might not have yet transferred to the trust.
The following are typically transferred to your trust:
- your home – transferred to the trust via a quit claim deed filed with the recorder’s office in the county where the real property is located
- any other house(s) you own,
- bank accounts – transferred to your living trust by the bank once you present them with an Abstract of the trust (summary)wel.
- You simply name any other assets you wish to place in your trust into the Schedule A, which is essentially a section of your living trust where you list all assets and their location to make it easier for your Successor Trustee to find. Items that are good to include are:
- art collection(s),
- collectible vehicles
- stocks and bonds
- anything else of value
Note that some assets do not need to be transferred to your living trust because the beneficiaries will get their bequests directly from trust-like instruments without probate, e.g, life insurance, IRAs, 401(k)s, annuities, pensions and transfer on death accounts.
Another option if you’re still wondering what to do with your living trust is to create it but not fund it, meaning, not transfer anything into it during your lifetime. After your demise, provided you have a pour-over will in place willing all of your assets to your living trust, it will expedite the probate process, making it much faster and less complicated. In such a case, the probate court simply has to approve the transfer of all assets to your living trust.
It is only if your living trust is funded before your demise that you completely avoid probate.
As you can imagine, it is wise to have a pour-over will even when you have a living trust. Typically, even if your living trust is funded during your lifetime, the pour-over will serves to bequeath to the trust any and all property that you have not yet transferred to it. This greatly shortens the probate process for anything left out of your living trust.
COMPLETE Living Trust PackageReview It With the Attorney!
- * Married Couple $425
- FREE phone consultation with the attorney who created your living trust
- Living will specific to your state of residence
- Revocable Trust Trust Summary (a one-page summary)
- Last Will and Testament (Pour-Over Will)
- Durable Power of Attorney for Health Care
- Directive to Physician
- Declaration of Intent
- Schedule A (where you list your assets)
- Prepared Simple Amendments (to complete at a later date if you so desire)
PEACE OF MIND
Mr. Smith gave me peace of mind with a Living Trust. He took the time to tailor the trust for my unique needs and circumstances. Mr. Smith is an outstanding attorney and I greatly value his advice.
Sandra R. Vicksta