How to Fund a Living Trust?

When creating a living trust, funding it is a crucial step. It can make the difference between a successful trust and one that falls short. Funding a living trust involves transferring property and other assets into the trust, in order to ensure that the terms of the trust are fulfilled. If the trust is not funded, the assets can be subject to probate, and may not be distributed according to the intent of the trust. This can cause long-term problems. 

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In addition to the main benefits of a trust, a properly funded trust can save estate taxes. A trust can also prevent creditors from attacking your inheritance. For example, if you own a home, your spouse can receive the proceeds from the house, instead of selling it. The trust can also help to provide for your children after you pass away. 

To fund a living trust, the first thing to do is determine whether or not you have any property you’d like to give to the trust. Assets you can transfer into the trust include stocks, retirement accounts, bank accounts, real estate, and even vehicles. Depending on the types of assets you own, it may be easiest to create a new bank account in the name of the trust. 

Another option is to transfer the title of your real estate or investment property into the trust. This ensures that the terms of the trust will apply, and that you have legal title to the property. Before signing over the property, it’s a good idea to review titling on your bank statements. Afterward, the trustee has full control of the property. 

You should also keep in mind that if you are planning on making major changes to the assets you have, you’ll need to check your life insurance policies and annuities to see if they allow for Beneficiary Designation. There are also many tax-qualified assets, such as IRAs, that require a Beneficiary Designation. Consult a financial professional for more information. 

Lastly, you can use the Assignment of Rights to create a trust that is the beneficiary of certain assets, such as mineral rights. This is particularly important if you own oil, gas, or mineral rights. 

Creating a trust is only the first step in the process of planning your estate. You’ll need to follow up on the second step, which is to fund the trust. Unfortunately, many people skip this step, which means they miss out on the many benefits that a trust can provide. Failing to fund a living trust can lead to your assets passing under your will, instead of to the right person. 

Funding a trust is a complicated process. It can be time consuming and tedious. Thankfully, most banks can help you set up the right bank account. However, if you are unsure about what to do, consult a lawyer or financial planner to get the advice you need. 

Ultimately, funding a living trust is a key part of any estate plan. Without it, your assets will be subject to probate, and you’ll likely have to leave a will if you wish to leave a legacy for your children.