Last week we looked at some common ways people can fund a trust. This week we want to continue the discussion, and explain some additional trust funding methods. If you’ve read any of our blogs about trusts, you probably know that funding is a necessary step in the trust creation process. Even the most well-designed trust will be useless if it’s not funded properly. Talking to your lawyer so you’re clear about what you’ll need to do to fund a trust, and then taking the steps you need to take, is essential.
Transferring Title of Real Estate
For most people, their home is their single largest asset, and taking special care to ensure the home is properly transferred into the trust is crucial.
The process of transferring title of any real property to a trust can be a little complicated, and can differ significantly depending on the state where the property is located. For example, someone transferring title of a property located in Kansas, Missouri or Oklahoma where he or she resides will have to use a deed. There are many kinds of deeds that can be used, each of which must contain specific information.
On the other hand, if you have real estate located in a different state, such as a vacation home in Colorado or Florida, you will have to go through slightly different steps, and use different documents.
Transferring Bank or Investment Accounts
You can usually transfer a bank account, investment account, or other asset you have through a financial institution fairly easily. You’ll have to contact your financial institution and ask them what they require for you to make the transfer, but the process is usually no more difficult than filling out a couple of forms.
A vehicle, such as a car, RV, boat, or anything else that requires a title, can easily be transferred into a trust with a few basic steps. Like real estate, the steps you’ll have to take differ depending on the state in which you live, but it essentially requires filling out the back of the car’s title with the name of the new owner and sending in for a new title.
Transferring Credit Cards
If you’re operating on the idea that a trust is like a business, that’s a good way to visualize a trust and make it easier to understand. However, the analogy is not a perfect one. For example, if your trust is like a business, it would make sense for your trust to need a credit card. This would mean that you might need to transfer one of your credit cards into the trust’s name.
But this isn’t correct. A credit card is not an asset. As such, there’s no need to transfer your card to your trust.