So, you’ve done a great job at finally creating your estate plan and revocable living trust. Now you have a really nice, and probably expensive (unless you went with us) paperweight.
There is now the crucial phase that follows estate plan creation—FUNDING your revocable living trust.
What does funding mean? It is the process of transferring your assets to the trust or naming the trust as the designated beneficiary on key accounts and assets.
This step is so, so important on how to ensure your assets are seamlessly integrated into your trust, providing you with control, flexibility, and the ability of those assets to pass or be managed outside of the probate process.
The reasons the Trust is usually listed as the beneficiary vs a person are many. If you have younger beneficiaries, they don't get a full lump sum (such as an insurance benefit which can be hundreds of thousands of dollars) or to ensure that if a beneficiary is not available (predeceased), the distribution of that asset will be able to go to a contingent beneficiary listed in the Trust.
The steps to take after creating an estate plan:
Inventory Assets: Compile a comprehensive list of your assets- you can list these all in our Legacy Vault (hint hint) to make it easy for your loved ones to find and access all important documents.
Assess Ownership: Verify how each asset is titled.
Title Transfer: Re-title assets in the name of the trust (homes/properties, cars, anything with a title).
Update Designations: Change the beneficiary designations to the trust (bank accounts, investment accounts, life insurance policies, etc.)
Validation: Confirm all changes with institutions and agencies.
Upload into Your Legacy Vault (yes, the one we offer for a one-time fee for lifetime access): or if you are lame and don’t have our Legacy Vault (just kiddingggg) keep a nice and tidied spread sheet for your loved ones and/or Trustee/Executor
How do the basic assets get into the trust?
Bank Accounts: Ensure accounts reflect the trust as the owner or beneficiary.
Real Estate: File new deed transferring property to the trust's name.
Vehicles: Update vehicle registration and title for ownership under the trust.
Personal Property: Transfer ownership of valuable personal items into the trust.
Investments: Change account registration to the trust's name for stocks, bonds, and mutual funds.
Bank Accounts:
Your Bank Accounts should list the Trust as the Designated Beneficiary. To do this, you should:
Make an appointment with a banker at your bank.
Take the signed original, notarized, Certificate of Trust to the bank.
Tell the banker that you have formed a Trust and would like the “Designated Beneficiary” of your accounts to be listed as the Trust.
The banker will take a copy of your Certificate of Trust and then list the Trust as the beneficiary of your account when you pass away.
When you pass, your Successor Trustee will bring your Death Certificate to the bank, letting them know you passed and the bank will then close that account, open a new trust account and transfer your assets in that account to the new Trust Account.
Describing the procedure for home transfers:
Any Real Property (home/condo/land) you own should be deeded to the Trust as the owner of the property. You can do this by:
Taking the signed original, and notarized, "Grant, Bargain, Sale Deed" to the County Recorder to be recorded with the County. This transfers the ownership of the property now to the Trust.
The recording Fee is typically around $55 - $100 depending on the County.
Depending on the County, you will also need to bring with you:
the Certificate of Trust for the recorder to review.
Assessor Tax Declaration – with the appropriate exemption for the assessor.
Transfer of Ownership Declaration.
Vehicle transfers/Mobile Home transfers:
Transfer of vehicle titles to your trust requires specific forms and procedures, typically through your state's DMV. As with other properties, the vehicle's title needs to reflect the trust as the owner, which may involve certain fees or taxes, depending on jurisdiction. Proper endorsement ensures your vehicles are incorporated into your trust's structure.
Any Vehicles you own outright (that you have a title/pink slip) should be registered with the Trust as the owner.
To do this, you should:
Make an appointment with the DMV.
Take the signed original, notarized, Certificate of Trust to the DMV.
Tell the DMV that you have formed a Trust and would like the Trust to be the titled and registered owner of the vehicle.
The DMV will take a copy of your Certificate of Trust and then issue a new title and registration with the Trust as the owner of that vehicle.
This applies to vehicles, trailers, boats, etc. with a title of ownership with your DMV.
Information on transferring investment accounts:
You should update any investment accounts with the Trust as the Designated Beneficiary. To do this, you should:
Make an appointment with your investment broker.
Take the signed original and notarized, Certificate of Trust to your broker to take a copy of.
Tell the broker that you have formed a Trust and would like the “Designated Beneficiary” of your investment accounts to be listed as the Trust.
They often will have you fill out a change of beneficiary document. Often times the transfer can be done online.
The broker will take a copy of your Certificate of Trust and then place the Trust as the beneficiary of your account when you pass away.
When you pass, your Successor Trustee will bring your death certificate to the broker, letting them know you passed and the broker will transfer the investments to the Trust, typically to the newly opened trust bank account.
Don't navigate the complexities of trust funding alone. We are ready to guide you every step of the way. Act now to ensure the security of your legacy. Get started here.
And be sure to get all your documents and life set up and secure with our Legacy Vault HERE!
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