Before we look at the matter of funding, we should explain some things about trusts in general. There are various different types of trusts used in the field of estate planning, and contrary to popular belief, they are not exclusively for very wealthy people.
There is another type of trust for the “rest of us” called a revocable living trust.
The truth is that a revocable living trust would not be the right choice for wealthy people who want to protect their assets and reduce their estate tax exposure. Assets in a living trust would be counted for estate tax purposes, and they would be in play if a legal action was to be initiated.
Living Trust Benefits
If you establish a revocable living trust, you can act as the trustee and the beneficiary while you are alive and of sound mind. Since the trust is revocable, you can dissolve or rescind the trust at any time. You have total control, so you always access the resources.
You name a successor trustee and a successor beneficiary when you draw up the trust agreement. The successor trustee can be someone that you know, but you could choose to engage the trust department of a bank or a trust company.
After your passing, the successor trustee would be legally compelled to follow instructions that you leave behind in the trust declaration, and assets would be distributed to the successor beneficiaries in accordance with your wishes.
A revocable living trust can be a good choice for you if you want to facilitate smooth and efficient postmortem asset transfers.
Funding a Living Trust
When you fund a living trust, you are making the trust the new owner of the resources. To do this, you list assets that you are putting into the trust in the trust declaration, and you must change the ownership registration of the property that you are conveying into the trust.
Another option would be to list the property that you are placing into the trust on a separate document that is called a schedule.
Assets In Your Personal Possession
If you create a living trust, you should also execute an accompanying document called a pour-over will. You may pass away with personal property in your possession that was never conveyed into the trust. The pour-over will allows the trust to capture this property after your passing.
Set up a Consultation
Living trusts are very popular, and many people decide to establish this type of trust when they gain a full understanding of all of the benefits. If you’re interested, contact us through this page to set up a consultation: Ft. Myers, FL Estate Planning Attorneys.