A living trust can play a vital role in protecting your assets and getting them into the hands of those you wish as fast as possible once you die. Assets left outside of a trust (and not accounted for in another way, such as a beneficiary designation) usually need to go through probate, which can be a slow process.
There are several ways to move assets into a trust or “fund the trust,” as it is more formally known. The following are a few of the most common.
Make the trust a beneficiary
Some assets, such as certain life insurance policies and retirement accounts, permit you to designate a beneficiary. Once you die, the company in charge of those assets will pass them to the beneficiary you’ve named. Even if you’ve said differently in your will, the beneficiary designation takes preference. If you wish to name a trust as the beneficiary instead of a person, you can. Some people prefer this as it helps to keep things in one place.
Make the trust the titleholder
If you own a house or a portfolio of properties, you can move the titles out of your name and into that of the trust. You can do the same with stock and bond certificates and non-IRA and non-401K investments.
Give the trust ownership
Some physical assets do not have a title, for example, the marble statue in your hallway or the vintage car in the barn. If you wish them to go into the trust, you should draw up an appropriate document to say so. You can do similar for non-physical assets without a title, such as future royalties from a song you’ve written.
Learning more about the different estate planning options available to you can help you create an effective plan. Seeking legal guidance is a good way to get started.