By establishing a trust, your heirs could avoid probate court when they receive the property you intended for them. To prevent legal issues, however, those assets need to transfer to your trust before you die.
As noted by Ohio State University, properties that do not belong to your trust may end up going through probate regardless of your intentions. In addition to funding a trust, you need to write instructions for a trustee to follow when he or she manages its contents.
How do my assets become part of a trust?
The transfer procedure includes changing the name on a title or deed from yours to your trust. You may retitle an asset through the property’s titling agency. This typically involves an issuing bank or insurance company.
When you create a living trust, you may transfer assets to it directly as many times as you wish until your death. You may also fund a trust by naming it in your will.
Which assets may I transfer to my trust?
A trust may own real estate including your primary residence and rental properties. If you own a vacation home or timeshare, for example, you could add it to your trust with instructions on how your heirs could use it. Vehicles, stock portfolios and certificates of deposit may all transfer over to your trust.
Retirement plans, such as a 401(k) or an IRA, could also become part of your trust. If you own a life insurance policy or annuity, your insurance carrier may have a procedure to follow to name your trust as a beneficiary.
Effective estate planning often requires updating your documents to reflect changes in your properties. You may also wish to add or remove assets from your trust if your intentions change.