A living trust is a powerful estate planning tool that offers significant benefits. This legal document allows you to manage your assets during your lifetime and transfer them to your beneficiaries after your passing, often without the need for probate.
However, to reap the benefits of your trust, you need to fund it with the right assets. This means transferring ownership of your assets into the trust’s name, effectively making the trust the owner of your assets. This way, you ensure that when you pass away, the trust can distribute your assets directly to your beneficiaries, avoiding potential legal hurdles. Here are some assets you should not overlook when funding your living trust.
Real estate properties
If you own a home or other real estate properties in California, including them in your living trust is crucial. This enables you to avoid probate, the often lengthy and costly process of distributing your assets upon your passing. By transferring your real estate properties to your trust, you can ensure your loved ones can receive their inheritance without unnecessary hassle and delays associated with probate.
Financial assets
Your financial portfolio forms the backbone of your estate. Consider the diverse range of financial instruments you might own, from everyday accounts to long-term investments. Including these assets in your living trust ensures they are distributed according to your wishes. For instance, if you have set aside funds for your children’s education, placing these accounts in your trust can guarantee the money is used as intended.
Personal properties
While you do not need to include every personal item in your living trust, consider adding valuable or sentimental possessions. This might include jewelry, artwork, antiques or collectibles. If you have a cherished family heirloom, including it in your trust allows you to specify exactly how you want to pass it down.
Ensuring your living trust works for you
Establishing a living trust is an invaluable investment in your family’s financial well-being and peace of mind. Properly funding it can save your beneficiaries time, money and stress in the future.