6 Assets You Can Use to Fund a Trust

Funding a trust involves transferring assets into the trust’s ownership, and this process can provide numerous benefits, including probate avoidance, efficient estate distribution, and legacy planning. Here are six different types of assets commonly used to fund trusts:

  1. Real Estate

Real property, such as a home, vacation property, or investment real estate, can be transferred into a trust. This is often done through a deed of transfer that conveys ownership from the individual to the trust.

  1. Financial Accounts

Bank accounts, brokerage accounts, and other financial assets can be titled in the name of the trust. This is typically achieved by re-registering the accounts in the name of the trust, and it ensures that the assets are managed according to the trust’s terms.

  1. Stocks and Bonds

Individual stocks, bonds, and other securities can be placed into a trust. This involves re-registering the ownership of the securities in the name of the trust, and it allows for the efficient management and distribution of these financial assets.

  1. Business Interests

If you own a business, you can assign your ownership interest into a trust. This assignment of your business assets or shares ensures a smooth transition of ownership according to the trust’s provisions at your death.

  1. Life Insurance Policies

Life insurance can be used to fund a trust, particularly an irrevocable life insurance trust (ILIT). The trust becomes the owner and beneficiary of the life insurance policy, providing liquidity to the estate and potentially avoiding estate taxes.

  1. Personal Property

Tangible personal property, such as artwork, jewelry, vehicles, and other valuable items, can be assigned to a trust. Depending on the jurisdiction, this can be done through an assignment, a bill of sale or another appropriate legal mechanism.

It is important to note that not all assets should or can be placed in a trust. For example, certain retirement accounts like IRAs and 401(k)s have specific rules, which prohibit transfer into your living trust, and it is advisable to consult with legal and financial professionals to determine the best approach for each asset in your specific situation.

Work with an Experienced Estate Planning Attorney

If you find yourself considering the establishment or funding of a trust, or if you have questions about optimizing your estate plan, reach out to our office. Our experienced team is here to offer guidance, tailor solutions to your unique needs, and assist you in securing a robust financial legacy for the future. Call Wilson Law at 866-603-5976 or fill out our contact form and we will be in touch to schedule a meeting.