Why and How to Transfer Your Assets To Your Revocable Living Trust

These days many people choose a revocable living trust instead of relying on a will or joint ownership in their estate plan. They like the cost and time savings, plus the added control over assets that a living trust can provide.

For example, when properly prepared, a living trust can avoid the public, costly and time-consuming court processes at death (probate) and incapacity (conservatorship or guardianship). It can let you provide for your spouse without disinheriting your children, which can be important in second marriages. It can save estate taxes. And it can protect inheritances for children and grandchildren from the courts, creditors, spouses, divorce proceedings, and irresponsible spending.

Still, many people make a big mistake that sends their assets right into the court system: they don’t fund their trusts.

What is “funding” my trust?
Funding your trust is the process of transferring your assets from you to your trust. To do this, you physically change the titles of your assets from your individual name (or joint names, if married) to the name of your trust. You will also change most beneficiary designations to your trust.

Who controls the assets in my trust?
The trustee you name will control the assets in your trust. Most likely, you have named yourself as trustee, so you will still have complete control. One of the key benefits of a revocable living trust is that you can continue to buy and sell assets just as you do now. You can also remove assets from your living trust should you ever decide to do so.

Why is funding my trust so important?
If you have signed your living trust document but haven’t changed titles and beneficiary designations, you will not avoid probate. Your living trust can…

This article was sourced from estateplanning.com.

5 Replies to “Do I Need a Living Trust?”

  1. Do you have the foms to start a living trust? Will I need an attorney or can I do this myself.?There are numerous trust out there, will the living trust accomplish my needs? I don’t have much assets now but could have considerate funds shortly. Please advise and thank you.

    1. Hello Richard,

      This is a great question! While you can set up a living trust on your own, many people choose to use the services of an estate planning attorney. It is really up to the individual and is based on their level of knowledge about the process.

      – Aging IQ

  2. I understand this article is written for a national audience, but it is full of half truths and inaccuracies when applied to investors who live in Texas.

    First, the Texas probate process is not complicated or time consuming when a person leaves a properly written will. The legal process of the initial filing typically takes from two to four weeks. After the initial filing, the independent executor has full access and control over the assets. Where there are a limited number of simple assets, the rest of the process can take as little as six weeks. I have completed the whole process in as little as three weeks. In many cases, the executor is NOT required to file an inventory of the estate in public records. The total cost of the probate process in Texas starts at $3,000. There can be additional costs for real estate deeds and title transfer documents. The complete process can be very expensive where the estate holds numerous and complex assets, but similar costs are also incurred when the deceased investor holds the same assets in a revocable living trust.

    With the exception of management of assets during the investor’s lifetime, the rest of the stated goals can be accomplished with a will.

    The three big advantages in Texas for a revocable living trust is that (1) it provides a superior strategy for a family member or bank trust department to manage assets during the investor’s lifetime and (2) some of the title transfers can be accomplished before death and (3) there is a little less convenience for the wife and family.

    The simple fact is that a revocable living trust is a superior planning vehicle, but it is NOT the cheapest or easiest to set up. I recommend, draft and fund revocable living trusts for my client on a regular basis; however, a revocable living trust is not the default recommendation. Generally, I tell my clients that a will combined with appropriate powers of attorney is like buying a Honda Accord to drive from San Antonio to Houston. A revocable living trust is like buying a Cadillac or Mercedes instead.

    I have been practicing law for over 30 years, and a substantial portion of my practice involves use of sophisticated trust planning to provide asset management, asset protection and tax savings.

    Nathan L. Reneau
    Attorney at Law, CPA

    1. Thank you for your feedback Nathan. Most of our articles are for a national audience; however, it is good to note that this process will differ somewhat state-by-state.

  3. Hi there! I know this is kinda off topic but I was wondering which blog platform are you using for this website? I’m getting tired of WordPress because I’ve had issues with hackers and I’m looking at alternatives for another platform. I would be great if you could point me in the direction of a good platform.

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