Setting up a revocable living trust pursuant to an estate plan is beneficial,
however, the revocable living trust must be funded in order for assets
to effectively bypass probate. Many people believe that simply creating
and signing a trust is enough. This is the farthest from the truth. Each
type of asset has a separate funding process. The following is a summary
of the most common types of assets and how they can be funded into a revocable
Real Property: Any real property, which is intended to be titled in a revocable living
trust for estate planning purposes, is transferred via a property deed
which should be recorded in the property recording office in the county
the property is located. Alternatively, for Asset Protection purposes,
real property can be titled to legal entities such as limited liability
companies using the same method (via a property deed).
Privately Held Stock: Privately held security instruments (such as the stock of a small family
business) require proper assignment documents executed from the individual
owner(s) to the revocable living trust in order to properly fund the business
entity into the revocable living trust. Be mindful that the revocable
living trust must account for the distribution of such business assets
(if they are deeded into the trust), which can result in a more complex
Publicly Held Stock: Publicly held stocks or bonds require working with a stockbroker or through
the institution from which the assets were purchased in order to transfer
their ownership to a trust. An estate planning attorney can also assist
with this process, along with filling out the requisite forms.
Business Interests: Business interests require an assignment of business interest into the
revocable living trust in order to avoid probate. The revocable trust
should specifically account for the business interests within the trust
document and dictate the proper distribution after death.
Financial Products: Financial products, such as life insurance, typically have the revocable
living trust named as a primary beneficiary. In order to effectuate this,
beneficiary change forms must be filed with the provider serving the financial
product. Using the revocable living trust as the beneficiary should be
assessed on a case-by-case basis.
If you would like to review whether your revocable living trust has been
funded properly or for more information on Asset protection, Estate planning,
Business Law and/or Probate please contact the attorneys of The Presser
Law Firm, P.A.