Why Funding Your Trust Is Important and How To Do It

elderly man and woman filling paper formEstablishing a trust is an essential component of responsible estate planning. Unlike a will, which must undergo the probate process in court, a trust streamlines the distribution of your assets after your passing by bypassing this step. But just how crucial funding a trust is? To fully understand the importance and methodology of promptly funding your trust, let us examine the rationale and process in greater detail.

What Is a Trust?

The term “trust” refers to the legal document that outlines how you want your assets controlled or transferred to another individual or entity upon your death. A trust will also appoint a trustee who serves to ensure that your instructions are carried out. There are different types of trusts that can be created based on various factors. However, they all follow the same basic principles.

Why You Should Fund Your Trust

It is not uncommon for those setting up a living trust to wonder if they should fund it right away or wait. This is normally because once property is used to fund a trust, you no longer technically own it. However, by funding your trust now, you prevent the unfortunate scenario where you pass on before being able to sign over the property to the trust.

How To Fund a Trust

Generally speaking, funding a trust is fairly straightforward if using cash, securities, or personal property such as jewelry. You simply need a bank account, brokerage account, or safety deposit box. However, real estate or other property that must be passed through a deed may require the help of a San Jose, CA, trust attorney.

Personal Property

For assets that do not have formal titles or deeds, signing a general transfer document is usually all that is needed. It is good to be specific in this document. However, general categories such as “clothing” or “furniture” may be acceptable in place of itemized lists.

Financial Accounts

In the case of transferring a bank account or something similar, it is often recommended that you consult with your financial institution, as each has its own process. Typically, there are forms that must be completed and returned in order for the account(s) to be transferred to your trust.

Real Estate

Transferring real estate to your trust can be more difficult. The process itself varies slightly from state to state, while counties can dictate the format of the deed, how it is filed, and any related paperwork. There are also different types of deeds that can be used, which is why it is crucial to consult a trust attorney in San Jose, CA, for deed transfers in the area.

Business Interests

Unfortunately, there is no one-size-fits-all approach to transferring business interests to a trust. That being said, checking with business records to see if there are any specific requirements that must be met is often the first place to start.

Life Insurance

Unlike other assets, it is not necessary to transfer ownership of a life insurance policy. Instead, be sure that your beneficiaries are correctly designated. You can have all the proceeds go to your trust or your loved ones. If you choose the trust, the proceeds will be managed and distributed according to the terms of the trust.

Retirement Accounts and Plans

Retirement accounts, like life insurance policies, typically do not require a transfer of ownership. In fact, transferring ownership of a retirement account could potentially result in negative tax implications. However, similar to life insurance, you can specify whether the proceeds from your retirement account go directly to your loved ones or to your trust. It is important to note that if you choose to send the proceeds to your trust, the distribution of the funds will follow the terms of your trust.

Have a San Jose, CA, Trust Attorney Help You Fund Your Trust

To ensure that your trust is set up and funded correctly in accordance with the laws governing a living trust in California, consult an experienced team of attorneys from Keyes Law Group. We have the knowledge and experience you need to make sure that your trust is established correctly and carried out as intended. If you need help creating and funding a trust, contact a reliable San Jose, CA, trust attorney today at 408-766-7668.

CLIENT TESTIMONIALS

"I have had the pleasure of working with the Keyes Law Group these past months. To date, Mr. Keyes has been a great asset to our family; helping to plan a trust and the appropriate tax strategies for us and the next generation. What has worked very well for my wife and I is the time Mr. Keyes has devoted to not only hearing our financial planning concerns, but to also take the necessary time to explain and offer options for us to consider. We have worked with tax attorneys and financial consultants over the years. For us, a successful relationship is one of the key factors that we strive for. Working with the Keyes Law Group has been a very good fit for us as we work to get our financial affairs in order." -- RY
"I can’t say enough great things about Keyes Law Group! They are thorough, caring, and extremely efficient! I send everyone I know to them for Estate Planning! They took such great care of my family and they have earned my business forever! Look no further than Keyes Law Group if you want a seamless process and to cover all bases for your estate! They aren’t just Estate Attorneys; they are family!" -SL
"The patience with helping us achieve our goal and the patience in breaking down the legalese into simple language that we could understand was very beneficial. We felt we were very well taken care of." -GR
"We truly appreciate your thoughts, ideas and time. I very much value your expertise and look forward to more dialogue about best ways to move forward, build healthier relationships with our children and their children and to pass on our values to the degree we are able." -R.Y.
"I was able to have a honest dialog with such an understanding, compassionate, and caring human being. Thank you." -Y.H.
"I've had the opportunity to work with Elijah for several years now. I started during a challenging situation with my mother and he was terrific. I'd say he's very responsive, reliable and exceptionally fair. Also very empathetic. It's refreshing to engage with him and feel that I'm being well taken care of and my needs are being met. His staff is also lovely and overall super accommodating." -I.S.
"It is very important to research and choose wisely when looking for an estate planning attorney. Did you know that the California State Bar Board of Legal Specialization has a unique recognition for attorneys who go beyond the regular requirements to practice Estate Planning? Elijah Keyes has this designation; Certified Estate Planning Specialist. He is extremely well versed with this specific area of law and is a strong advocate for his clients in estate planning, including establishing living trusts, wealth planning and family transfers, dynasty trusts, conservatorships, special needs trusts, elder law medi-cal benefits and planning, trust administration and probate. Thank you Elijah, for being a trusted resource for us and for our clients!" -M.H.
"Keyes Law Group helped our family through a very difficult time with estate planning. He's honest, transparent and genuinely cares about his clients. His own personal experiences have shaped his approach in working with people - especially older folks who might be more mistrusting. He can finesse difficult conversations with ease and for that, I'm forever grateful. 100% recommend!" -Y.V.
"Elijah was very helpful with editing our family trust after my wife passed away. He answered all my question in a timely manner and if he did not know the answer he found out quickly. He would take time out of day to reassure me that he had everything under control. He took his time to explain why he worded the trust the way he did and that I understood what it meant. Will use him again when the trust needs to updated." -D.

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