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2 options for funding your California living trust

On Behalf of | Sep 27, 2023 | Estate Planning |

A living trust is an estate planning tool that allows you to manage and distribute your assets while living and after you pass away. Creating a living trust is wise, but you must fund it to have it operate as desired. In other words, an empty living trust is no good to you or your beneficiaries.

You have several strategies to fund a living trust in California. To ensure you make informed decisions, learn more about your funding options.

Direct asset transfers

Transferring property directly to the trust is a popular method of funding such a trust. Examples of assets you can transfer include real estate, bank or investment accounts and even personal property. With this strategy, you must change the ownership of the assets to the name of your living trust.

Make the trust a beneficiary

You can also name your living trust as the beneficiary for property such as bank accounts, insurance policies and investment accounts. When you do this, the assets will automatically transfer to the trust upon your death. Creating a pour-over will is one way to ensure your trust will receive undesignated assets after you die.

Why consider a living trust?

A living trust offers many advantages in an estate plan. It can keep your assets out of probate, protect your privacy and reduce estate and gift tax burdens. Such a trust can also protect assets from creditors — something your loved ones will appreciate after you die.

Before you commit to a living trust, it’s wise to have experienced legal guidance. Doing so can help you avoid missteps that could harm your estate plan and increase hardships for your family.

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