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Transferring assets is key to a California trust

by | Jul 28, 2016 | Trusts |

The revocable trust is a popular estate planning vehicle in California. With a revocable trust an individual can avoid probate, protect the person’s privacy, and provide for management of assets both during the person’s lifetime and after death. To establish a trust, the first major step is to prepare and sign a trust document which sets out how the assets in the trust are to be managed, and under what circumstances income and principal are to be distributed to the beneficiaries.

But, drafting and signing the trust document is not the end of the process. A trust does not become effective until assets are actually transferred into the trust, and most of the advantages of a trust stem from the fact that it is the trust — not the person who created it — who owns the assets.

The process of transferring assets into the trust is called funding the trust. In the funding process, new deeds for houses and other real estate are prepared, showing the trust as owner of the property. The deeds must then be properly filed with the recorder’s office for the county where the real estate is located.

Financial assets including checking and savings accounts, mutual funds, stocks and other securities should also be transferred to the trust. If the accounts have beneficiary designations, those may need to be changed to the trust. Valuable items of personal property can also be transferred to the trust.

At our Sacramento law firm, our attorneys take care of funding trusts on behalf of my clients, and we make sure it is done correctly and expeditiously. For more information on this part of our practice, please visit our Establishing Trusts web page.

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