One of the most commonly used types of trusts is a revocable living trust. A revocable living trust offers a variety of benefits to the settlor, or person who created the trust. People often use a revocable living trust as part of their incapacity plan, for example. By naming a spouse/parent/adult child as the successor trustee to your living trust you allow for immediate transfer of control over trust assets in the event of your incapacity. If you decide that a living trust would be a valuable addition to your estate plan there are two important steps you need to take to ensure that your trust has value. The first step is to establish a trust in your name. Once it is established, you need to fund it. There are several methods you can use to fund your trust.
Current Assets
You can get to work funding your trust immediately by using currently held assets. You have the right, barring liens or court orders, to take any asset in your name and retitle it to belong to the trust. Cash is one such asset but you can also retitle others such as stocks, bonds, and other investments that you own. If you have tangible assets that have value such as a rare coin collection or antiques you can also place them “in trust”. In addition, if you co-own assets with others you can retitle your portion of those assets to your trust.
Beneficiaries
Another way you can fund your trust is through beneficiary benefits. For example, your grandfather has told you he is going to leave you the bulk of his stock portfolio when he dies. You can instead ask him to bequeath those to your trust fund when the time comes. Your spouse may also be able to leave assets to your trust and you to his/her trust upon death. Be sure to consult with your estate planning attorney about how to accomplish more complicated funding methods such as this.
Real Property
If you wish to place your real property, such as a home, boat, or jewelry, in the trust this can be done as well. To complete this type of ownership transfer an attorney needs to prepare proper documentation, such as a deed, to transfer the asset to the trust.
Ideas and Inventions
Copyrights and patents are considered assets and you are allowed to put them in trust. This can be important as they have a potential to provide continued income after you die. If you wish to avoid the cost and hassle of probate, retitle them to your trust.
Stephen A. Mendel, Estate Planning Attorney
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