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How do you set up assets to put in a living trust?

On Behalf of | Feb 20, 2019 | Uncategorized |

If you are interested in setting up a trust fund for your children or grandchildren, you might not know where to start. Where will the money come from? How will the assets get to the fund? The process may be easier than you think.

What will you need?

Ideally, you should first think about why you want to set up a living trust fund for a certain person. In addition, you can ask your legal advisor a variety of questions. Who would ideally manage these assets? Can the trust be changed or is it fixed to your exact wishes?

Next, you will need to find an estate planning attorney within the right state. If you live in a different state than your trustee, your choice may affect fees and applicable taxes. A financial advisor can help you identify these and create a plan to avoid unnecessary expense.

How will you fund the trust?

With a living trust, you are the trustee and control the assets until the event of your incapacitation or death. You name a successor trustee who can control the assets if you cannot.

The assets for a trust can come from any number of places. These include the following:

  • If you will inherit the assets in the future (such as your retirement account or life insurance), you will need to name the successor trustee as your beneficiary.
  • If you have the title to the asset, you will need to name your successor trustee as the title holder. This process could be different for the individual titled asset. This includes cars, real estate, stocks or bonds, and investment portfolios that do not include IRAs or 401ks.
  • If your asset does not have a title (such as an heirloom, intellectual property, or other debts owed to you) you may need to individually name each one to the trustee. You can also include this in your will.
  • You can also consider creating a charitable lead trust or a charitable remainder trust. These dictate that a certain amount of your assets goes to a charity, and the rest goes to a trust fund (or vice versa).

There are other options you can explore to distribute your assets with a living trust. A California estate attorney can help you set up a living trust that fits local laws and your needs.