When a person creates an estate plan, they may choose to set up a trust in the process. This allows them to protect their wealth from taxes in order to pass on as much as they can to a beneficiary. In doing so, the trustor appoints a third-party trustee to manage their assets on behalf of a beneficiary. There are various different trusts that can be created based on what the trustor wants to accomplish. One of these being a revocable trust. Continue reading below and contact an experienced California estate planning attorney to learn more about these matters.
What is a Revocable Trust?
A revocable trust can be modified, changed, or terminated at any point during the trustor’s life. This can be done at any time without needing the permission of the beneficiary, as long as the trustor is mentally capable of doing so. It is because of this that it is a common choice for individuals looking to create a trust.
How Do I Fund a Revocable Trust?
A person’s revocable trust can either be funded during their lifetime or at their death. The actions one needs to take to fund a revocable trust can vary depending on what they are putting in the trust. This can include:
- Residences or other real estates. Trustors need to execute a deed to transfer real estate into this trust. In doing so, make sure all necessary steps are taken to receive the benefits of property tax exemptions or valuations.
- Marketable securities and cash that are not in tax-deferred savings. In these situations, trustors need to open accounts in the name of the trust. A bank or brokerage then needs to be told to transfer the assets from the individual account to the trust’s new account.
- Interests in closely held business entities. When transferring these assets, it is important to consult an attorney. This is because there are often restrictions on these transfers. This can include limits on types of transfers, requiring the consent of other parties before transferring, or requiring the consent of other parties before a transferee receives full ownership rights.
- Life insurance policies. While trustors can change the ownership of a life insurance policy on their own life to their trust, they should only need to change the beneficiary designation on the policy in most cases. In doing so, trustors must obtain a form from the life insurance company to accomplish this.
- Tangible personal property. This can include jewelry, furniture, artwork, books, clothing, electronics, etc. As these assets usually do not have ownership documents, they can be transferred through a general transfer and assignment document.
Contact our Firm
Working with an experienced estate planning attorney, such as Jaci Feldman of the Woodland Hills, California, Law Office of Yacoba Ann Feldman, will ensure that you are taken care of when you need it most. Contact The Law Offices of Yacoba Ann Feldman to schedule a consultation today.