Funding Your Trust | What you need to know about funding a trust

Want to know what it means to "fund a trust"?

Funding your trust is the process of transferring ownership of your assets from you to your trust. To do this, you physically change the titles from your individual name to the name of your trust. The name of your trust can be anything you want. The important thing is to make sure all assets are transferred into the trust!

1. Transfer Real Estate

Transferring real property to a trust requires a deed, typically a Trust Transfer Deed. Then the deed is recorded on the public record at the lands records office.

2. Transfer Titled Personal Property

If personal property has a title document (cars, trucks, ATVs, RVs, ATVs, boats and Mobile Homes.

3. Fund Untitled Personal Property

Personal property without a title document (furniture, books, jewelry, tools, collectibles, etc.), can be transferred with a notarized assignment of ownership of personal property. It is also called an Omnibus Assignment document. You want to transfer everything that is not real property by this instrument.

4. Transfer Bank Accounts

Your bank can tell you how savings, checking, and money market accounts can be titled in your trust. Bring a copy of your trust to the bank and ask them to put the account in the name of your revocable trust. You should insist that the bank continue to use your Social Security Number on the account. For your revocable trust, refuse any bank requests asking you to obtain a new Taxpayer Identification Number TIN, from the Internal Revenue Service.

5. Transfer Brokerage Accounts to your Trust.

Your broker can advise you how to retitle a brokerage account.

6. Transfer Business Interests

Interests in partnerships and LLCs, and shares in a corporation, can be retitled in the name of the trust. Check the partnership agreement, LLC operating agreement, or articles of incorporation, for transfer restrictions or procedures.

7. Change Life Insurance Beneficiaries

Your trust can be the owner and/or the beneficiary of a life insurance policy. Making the trust the owner allows the trustee to manage the policy in the event you become mentally incapacitated, such as borrowing against the policy to obtain funds for your care.

8. Transfer Royalties, Copyrights, Patents, Trademarks, and oil and gas rights or partnerships.

Whoever pays the royalties can advise you what is required to transfer the interest to your trust. Consult the United States Copyright Office for copyrights, and the United States Patent and Trademark Office for patents and trademarks.

9. Making The Trust as Beneficiary

Some assets may not be transferred to a trust, but you may be able to make the trust the beneficiary upon your death. These assets include:
Retirement Accounts. Do not retitle any qualified retirement account, such as IRAs, 401(k)s, 403(b)s, or qualified annuities, including those in brokerage accounts. This will be considered a withdrawal of the funds, subjecting them to income tax and maybe penalties. What you should do is verify your beneficiary designations with the vendors. Whether your trust should be the primary or secondary beneficiary depends upon your situation and tax laws. Get the advise of a qualified tax advisor before naming your trust as a beneficiary on any retirement plan, annuity, life insurance or any other tax deferred account. On Medical Savings Accounts (MSAs) and Health Savings Accounts (HSAs). Your trust should be designated as either the primary or secondary beneficiary (like a qualified retirement account).

By transferring your assets into your living trust, you bring them under the legal protection of this powerful estate planning tool. Once the trust is funded, the assets it holds will be protected from probate in most cases and offer your family peace of mind.
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Rex L. Crandell Firm
Walnut Creek Office
3000 Citrus Circle Suite 207
Mail: P O Box 30305
Walnut Creek, CA. 94598
(925) 934-6320
(800) 464-6595
E-Mail: rexcrandell@astound.net
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