Trusts can be useful for many kinds of estate plans. Depending on the situation, a trust can hold assets or provide guidance for their distribution.
A living trust can be helpful as you plan who will inherit the assets of your estate. With a living trust you can manage the assets in the trust while you are still alive.
Creating the trust, however, is only the first step. Unless it is adequately funded, there could be problems for the beneficiaries of your estate. Here’s what you should know about financing your living trust.
What can go in the trust?
With a properly funded living trust, the trust assets can go immediately to the heirs named in the trust, rather than having to go through the probate process. The asset you can put in the trust can include nearly anything with value, such as:
- Real estate
- Bank accounts
The person named on the trust (the trustee) can use the assets in the trust to take care of end-of-life expenses like medical costs or funeral arrangements.
How do I fund it?
A trust needs assets to function properly. Unfortunately, some people will miss the step of funding the trust by actually assigning the assets to the trust.
For some assets, the process of putting an asset in a trust is similar to giving it to another person. For example, if you want to put a vehicle in your living trust, you would need to transfer the title to the trust, making the trust (not you) the vehicle owner.
A trust can be helpful for you and your beneficiaries. It is essential to get experienced help creating a trust so that you, the trust and the beneficiaries have all of the elements to make the trust a valuable part of your estate plan.