Sacramento readers of this blog are familiar with the basic concepts of estate planning. They also likely recognize the important role that trusts can play in this planning process. Depending on one’s unique set of circumstances, specific types of trusts can prove beneficial in furthering one’s goals with regard to asset distribution upon death.
Deciding which types of trusts to create, if any, can be a challenging process. In fact, many individuals find themselves wondering about the nuts and bolts of it all. The first thought for many is a consideration of how assets are actually entered into a trust.
There are two ways to put property into a trust. The first is to do so while an individual is still alive. For property where a title is held, an estate planner can simply transfer that title over to the trust. This can include vehicles, retirement accounts and real estate. To complete this process, the name on the title will have to become that of the trustee. With regard to personal property, the right to that property must also be transferred to the trustee in order for it to receive the trust’s protection.
The second way to add property is to do so after death. This most commonly occurs when an individual creates a “pour-over will,” which allows all assets not distributed to beneficiaries to be entered into a trust. This may require the matter to go through probate, however, which families typically try to avoid.
Creating a thorough estate plan can give an individual peace of mind and protect his or her estate for years to come. However, it is a planning process, which means a lot of thought and effort must go into it in order for it to live up to one’s expectations. In the end, it is important that a person’s estate is incorporated into iron-clad legal documents, for the benefit of the person and his or her loved ones.