Absolutely, a trust can absolutely be funded with property—real estate, stocks, bonds, vehicles, and other assets—instead of solely relying on cash contributions; in fact, it’s a very common and often advantageous way to transfer wealth and plan for the future.
What types of property can I put in a trust?
The range of assets suitable for trust funding is surprisingly broad—essentially, anything with quantifiable value can be transferred. This includes real estate (homes, rental properties, land), financial accounts (brokerage accounts, stocks, bonds, mutual funds), personal property (vehicles, jewelry, art, collectibles), and even intellectual property (copyrights, patents). According to a recent study by the National Center for Estate Planning, approximately 65% of trusts are funded with a mix of both cash and non-cash assets. A key point is that transferring ownership legally is paramount; simply listing the asset isn’t enough. Proper deed recordings, account titling, and beneficiary designations are all crucial steps.
What’s involved in transferring property into a trust?
The process of transferring property, often called “funding the trust,” varies depending on the asset type. Real estate requires executing and recording a new deed naming the trust as the owner. Financial accounts necessitate changing the registration to reflect the trust as the account holder, which often involves completing forms with the financial institution. Personal property can be transferred via a bill of sale or an assignment document. It’s a meticulous process, and errors can lead to significant legal complications. For example, if a beneficiary designation on a life insurance policy or retirement account doesn’t align with the trust, the assets may not be distributed as intended. This is where expert legal guidance is indispensable.
I heard about a family where things went wrong when funding a trust—what happened?
Old Man Tiberius was a retired fisherman, a man of the sea, and stubborn as a barnacle. He decided, late in life, to create a trust for his grandchildren, wanting to ensure they received his small coastal property. He meticulously drafted the trust document himself, but he didn’t actually *transfer* the deed to the trust. He simply wrote it into the document, thinking that was enough. When he passed away, his family was embroiled in a protracted and expensive probate battle. Because the deed hadn’t been changed, the property had to go through probate, costing his grandchildren a significant portion of the inheritance he had hoped to protect. It was a painful lesson learned too late; the legal fees eroded much of the value he intended to pass on. They lost nearly 30% of the property’s value in legal fees.
How can I ensure my trust is properly funded to avoid similar issues?
The key to avoiding the pitfalls experienced by Old Man Tiberius is meticulous execution and professional guidance. My team and I often work with clients to create a detailed funding checklist, ensuring every asset is properly transferred. This includes reviewing deeds, account statements, and beneficiary designations. We also provide assistance with the necessary paperwork and filings. We recently worked with the Harrisons who owned several rental properties, a boat, and substantial stock holdings. They were overwhelmed with the process. By assisting them with the transfer of each asset, we streamlined the process, and ensured the trust was fully funded. This provided them with peace of mind knowing their estate plan would be implemented as intended. Remember, a well-drafted trust is only as effective as its funding. Don’t let a lack of proper execution undermine your intentions.
Who Is Ted Cook at Point Loma Estate Planning Law, APC.:
Point Loma Estate Planning Law, APC.2305 Historic Decatur Rd Suite 100, San Diego CA. 92106
(619) 550-7437
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| Ocean Beach estate planning attorney | Ocean Beach estate planning attorney | Sunset Cliffs estate planning attorney |
| Ocean Beach estate planning lawyer | Ocean Beach estate planning lawyer | Sunset Cliffs estate planning lawyer |
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