By GNGF on August 23rd, 2022 in
When you establish a Revocable Living Trust, you are able to pass your assets to your loved ones without having to go through probate court—a process that can also cause significant delays and stress for your loved ones. When you set up a Revocable Living Trust, you should include a schedule of your assets, listing all the assets you are placing in the trust. When you transfer your assets into the trust, you are changing the legal ownership of those assets from your name to the name of the trust. Although this can sound a little alarming, most people name themselves as the trustee, remaining in total control of their assets.
As your circumstances change over the years, it’s a good idea to take a look at your trust at least every three to five years—or any time a major change has occurred (marriage, divorce, death, the birth of a child or grandchild, a significant increase or decrease in finances, etc.). You may wonder which assets you can place in your Revocable Living Trust—and which assets you cannot place in the trust. Below are some guidelines, although your best course of action is always to speak to a knowledgeable estate planning attorney from Gullotta Law Group to ensure your Living Trust is properly prepared and that all chosen assets are placed in the trust.
What Assets Can You Place in Your Trust?
The following assets can be placed in your trust:
- Checking and savings accounts, money market funds, and CDs. It is possible that your bank may consider a CD retitling an early withdrawal, which could trigger penalties. If this is the case, you may want to wait until the CD matures before you retitle and place it into the trust.
- Brokerage or Investment accounts. This does not include retirement accounts such as, 401(k), 403(b), IRAs or other qualified annuities.
- Tangible personal property can be placed into a trust. Tangible personal property can include personal items such as computers, antiques, collectibles, artwork, boats, airplanes, firearms, livestock, tools, and even items like household goods, clothing, jewelry, and personal papers. Because a motor vehicle that is titled in an individual’s name cannot be transferred without probate in some states, it is probably not a wise choice to include motor vehicles in your trust.
- Business Interests, including membership in limited liability companies, interest in general and limited partnership interests, and stock shares in a closely held corporation can all be placed into a trust, with some caveats. As an example, a limited liability company may require the consent of the other owners to be included in your trust.
- Stocks and bonds that are held in certificate form can be placed in your trust by obtaining a Medallion Signature Guarantee on the stock transfer form, then mailing the original certificates via registered mail. You could also deposit your certificates into a brokerage account that is titled in the name of the trust.
- Life insurance policies can be added to your living trust, although there may be better ways to handle your life insurance.
- Oil, mineral, and gas rights can be added to your trust, although this may require an assignment or a new deed, depending on the type of ownership interests involved.
- Real estate can be transferred into a Revocable Living Trust by recording a new deed in the name of the trust in the county where the real estate is located. A mortgage on the property should not cause issues, since a mortgage follows the property. The beneficiary will inherit not only the property, but the mortgage as well.
- Any money owed to you, whether form a secured or unsecured personal loan can go into the trust, naming the trust as the current lender.
The items that should not be placed into your trust include:
- Qualified retirement accounts
- Uniform Transfers to Minors Accounts
- Uniform Gifts to Minors Accounts
- Motor Vehicles
- Health Savings Accounts
- Medical savings Accounts
Gullotta Law Group Can Help You Set Up a Trust, Then Place Assets in the Trust
At Gullotta Law Group, we want you to be involved in your estate plan; we will work with you to tailor an estate plan specifically to your needs and wants. If you want to set up a trust, we will prepare a legally binding trust document to ensure your wishes are properly carried out after you are gone. You will work directly with Attorney Gullotta throughout the process as we strive to provide stellar legal estate planning services. Contact Gullotta Law Group today!