Law Office of Sarah E. Galvin
433 Estudillo Avenue, #305
San Leandro, CA 94577
You have been to your attorney and worked with her to prepare the paperwork. By now you know exactly how you want your assets allocated. You have assigned a Trustee to carry out your wishes when you no longer can. But there is one last thing that needs to be done. You need to actually move your assets into the Trust. This is called “funding” the Trust. In order for your Trustee to do everything as you want, to provide for your loved ones according to your plan, your assets will have to be named in the Trust, rather than individual ownership. Anything that is not contained in the Trust will be fair game in probate court if it is not taken care of before you die or become incapacitated.
Generally, ALL of your assets should be included in your Living Trust. It would be ideal if you could just put everything in the Trust with clear instructions on how you want each item handled or allocated, but like most things, it is not that easy. Perhaps you are a joint owner of some assets, or your spouse had other children before you married. There might be unusual conditions on property that you don’t want beneficiaries to deal with when you are gone or out-of-state property that is obliged to other laws. Will life insurance be considered an asset at the time of your death and will there be estate taxes tacked onto the transfer of benefits? How about IRA’s and other tax-deferred plans? And can’t I just say “my car goes to my grandson” in my will without actually putting it into the Trust? Ownership of property and other assets can be complicated by many factors, some of which are best explained by an Estate Planning Attorney.
Most attorneys will provide you with instructions to move your assets into the Trust and usually they will move your home for you. Your attorney can review each asset you want to move into the Trust and she can provide instructions and forms to do this. You may want her to do most of the work, but it can take a lot of time and you will be billed accordingly. After you have her transfer some larger assets and see how it works, you may want to save on legal fees by doing some of this yourself.
An important tool to remember is something called a “pour over will”. This legal instrument essentially “scoops up” any asset that may have been forgotten and puts it into the Trust. You will need to talk to your attorney about the pour over will as it can be a safeguard of sorts, but may not allow the forgotten assets to escape probate.