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Don’t forget to fund your Living Trust!

By March 14, 2014August 21st, 2020Estate Planning, Power of Attorney, Trust, Uncategorized

Funding Your Living Trust in California

Creating a Living Trust in California is great but there is one additional step that needs to be taken in order to make sure your assets are protected from the dreaded Probate Court.: you need to fund the Trust!

Imagine your Living Trust as a large box. Everything in the box is protected from probate. However, everything left out of the box is vulnerable to a potential probate. Therefore, in order to protect your assets you need to place them in your Trust. Placing your assets in your Trust is termed, “funding the Trust”.

But who controls the Trust assets?

Once your assets are placed into your Trust, the Trustee of the Trust will have all the powers that you had when the assets were in your name. That is why the Trustee of your Trust is typically you, the Trustor or Settlor of the Trust.

Funding the Trust

Funding a Living Trust in California is an easy enough process, although it can be time consuming. What is needed is for the title of your assets to be changed from your name to the name of the Trust. We normally will transfer your Real Estate into your trust. We also provide you with an Assignment of Personal Property which will place your personal property that you currently own and will own in the future into your Trust. You will also receive a worksheet to make specific personal property gifts. Lastly, we will also provide you with a detailed guide on how to place your remaining assets into your Trust.

Note: not all assets should be placed in the Trust. It is important to know which assets to place in the Trust and which assets to leave out.

Assets to leave out of your Living Trust

Some assets, such as life insurance, retirement accounts and IRAs, may have adverse tax consequences if placed in your Trust. Therefore, it is important to discuss with an experienced California Living Trust attorney what assets to place in your Trust and what assets to leave out. At the Law Offices of Jack B. Friedell, we take the time to explain the advantages and disadvantages of placing specific assets into your trust. We offer you California estate planning legal advice to ensure your specific goals are being met.

Note: since not all of your assets should be placed into your Living Trust, it is imperative that we also create a Durable Power of Attorney for you. A California Durable Power of Attorney will allow your agent to access all of your assets outside of your Living Trust.

A couple “safety nets”

If you have a Living Trust but fail to properly fund the Trust, we also provide you with a “pour over will” and a Declaration of Trust to make sure that all your assets end up in the Trust.

A “pour over will” is simply a Last Will and Testament that can grab up to $150,000 of assets not in your Trust and “pour” those assets into your Trust. Then, once the assets are part of your Trust, the provisions in your Trust will dictate how the assets are distributed.

A Declaration of Trust is a final line of defense that we create for you in the event that the assets outside of the Trust exceed $150,000. The Declaration of Trust simply acknowledges to the Probate Court that you intended all your assets to be placed in your Trust.

We are here to help

There really is no better time to get your estate plan in order. Please contact an experienced trust and estate lawyer in California today!

Stop by our estate planning 101 section to learn more about why you need an estate plan.

The authors, publisher and host are not providing legal, accounting, or specific advice to your situation.

Jack Friedell

Author Jack Friedell

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