If you have created a trust or are considering doing so, you will need to know how to fund your trust once it exists. A trust only works if it owns your assets instead of you, and you will have to go through the process of putting all your assets into the trust once you have created and signed it according to Virginia or West Virginia Law. Thankfully, trust funding sounds more complicated than it is! Here is a trust funding checklist:
1. Retitle Your Real Property.
Retitle your land and properties into the name of the trust, so that the trust owns them instead of you. For your home(s), you will need to contact your homeowner’s insurance and make sure they know that you have created a trust.
2. Change the Beneficiary on Your Financial Accounts.
Your financial assets are next on the list. You will need to change the beneficiaries of your accounts from specific people to your trust. This way, when you pass, your financial assets are owned by your trust and will be distributed among your heirs as you have indicated in your trust document.
3. Assign Personal and Intellectual Property.
Personal property means physical items such as jewelry, clothing, and furniture. It does not include money (financial assets) or land (real property). Intellectual Property means intangible personal property, such as copyrights or trademarks you may own. How do you put these kinds of assets in your trust? When we create trusts for our clients, we also create a legal document called an assignment, which legally transfers the ownership of these types of assets into the trust. Also, some high value items require additional legal documentation to transfer them into the trust. To ensure that your personal and intellectual property is correctly owned by your trust, it is best to work with an estate planning attorney who specializes in creating trusts.
4. Retitle Qualifying Vehicles into the Name of Your Trust.
We usually recommend that you only retitle your vehicle if it is worth more than $100,000. Most other vehicles can be dealt with easily via a Small Estate Affidavit after you pass, and it is not normally worth the hassle with the DMV to change the title now.
5. Assign Your Business Shares.
If you own all or a part of a small business, this ownership needs to be assigned to the trust, so that the trust owns it instead of you. You can work with an attorney to create an assignment of ownership; a legal document that transfers your ownership in the business to the trust.
6. Perform Yearly Maintenance on Your Trust.
Once you have completed the initial trust funding checklist, your trust will need to be maintained on an ongoing basis. At least once a year, you should review the checklist and your assets. If you gain any new assets from year to year, you will need to transfer those out of your name and into the trust. It is also wise to double check your previous assets to ensure they have all been correctly titled in the name of the trust.
Relational Law Guardian Program: Trust Funding and Maintenance Does Not Need to Overwhelm You!
Because trusts require yearly upkeep and can be a burden for some people to manage, we have created our Guardian Program to assist you. Our Guardian Program is a service we offer to take on the yearly upkeep of your plan so that you don’t have to worry about it. We ensure:
- your plan stays up to date and accurate,
- your plan will be easy for your personal representative to implement,
- your plan will work as you intend when the time comes, and
- your agents and personal representatives have a relationship with other professionals who will help them implement the various parts of your plan.
Trust funding does require effort, but once it is complete, you will have an estate plan that is private, avoids probate, and is easy for your personal representative and loved ones to implement. If you need help creating a new trust or maintaining your current trust, give our firm a call. We can help!
Disclaimer: The information you obtain in this post is not, nor is intended to be, legal advice. This blog shares general best practices when navigating Virginia or West Virginia law, but you should consult an attorney for advice regarding your individual situation.