When we discuss living trusts and other estate planning documents, we often focus on how they can help and how to set them up. But we often overlook details about what happens once the plan is in place.
In the case of living trusts, what happens after a document is finalized and signed? Specifically, what is the process for funding, or transferring assets into, the newly-established trust?
In California, the process of funding your living trust typically involves two elements:
- Changing the titles of your assets from your name to the name of the trust
- Changing the beneficiary designations of assets in your trust
Accurately and thoroughly completing these tasks will help your loved ones to avoid the probate process after your death or court intervention in the event of incapacity. A qualified estate planning attorney can assist with setting up and funding your living trust the right way.
It is important to understand what assets you want in your trust vs. those you should not transfer. In California, you can transfer both community and individual property. You should consult with your attorney, as individual situations may vary. The following, however will provide some guidance while considering your assets.
Assets you may want to transfer:
- Real property (home, land, commercial real estate)
- Bank or credit union accounts
- Safety deposit boxes
- Investments (CDs, mutual funds, stocks)
- Business interests
- Intellectual property
- Artwork, jewelry and other untitled property
Assets you may not want to transfer:
- IRAs, 401(k)s and other retirement accounts
- Incentive stock options
- Professional corporations
- Life insurance policies (although you can change the beneficiary designation to the trust)
