Putting a trust in place as the centerpiece for your estate plan is only step one. Step two, which is just as critical, is to ensure ALL of your assets are titled to the trust.
Think of a trust like a box. This box is designed to hold your assets. But if the assets are outside of the box, the box (aka the trust) does no good. Proper funding of the trust is an important step in the estate planning process.
So “how” do you put your assets into the box? How is a trust “funded”?
All it takes is to change the “title” on your accounts to be your trust. Or, in the case of real estate, have a deed recorded transferring the ownership from you to your trust.
For example, you have a savings account at Wells Fargo. Each month you get a statement from Wells Fargo listing the account title as “Mr. and Mrs. Jones”. With the instructions that we provided you, you simply have to go Wells Fargo and request the name on the account be changed to the “Jones Living Trust.” And once that is done (and you will know for sure when you get your next month’s statement) that account is in your trust.
And with Real Property, the step to record a deed is even more critical – especially if you have property in more than one state. As you purchase any piece of property, have the title company name the trust on the deed. If you are establishing a new trust, make sure you let your attorney know all of the properties you have so that they all can be properly transferred into the trust.
For those of you who already took step one, kudos, you have an important piece to your estate plan. Now make sure step two is complete! And remember to check on the titling of all of your assets. We would be happy to have you come in to get those assets reviewed.
Contributed by MH Albuquerque, Las Cruces and Santa Fe Estate Planning Attorney James P. Plitz.
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This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.