How do I fund my living trust? It’s a common question and, as we will see in this article, it is not so difficult to find the right way to go
So, you’ve finally established your living trust. What will you do next? We’re going to explore funding your living trust and what happens if you forget.
If you’re anything like me, it probably took some time for you to finalize your trust. Even though we had all the time in the world and for me, my wife and I had a baby, the pandemic shutdown seemed to make things slower, so I think that’s a legitimate explanation.
I did this during COVID time, and it took me well over nine months. A living trust could be set up as a response to certain life circumstances, such as having a child.
The next step is to finance your living trust, which entails visiting each bank and either transferring money to each account or designating the trust as the beneficiary. All of your real estates must have its titles transferred into that trust. If you decide to handle it yourself rather than hire an attorney, you’ll need to travel to the nation where the property is located and file the transfer yourself. This step is crucial because, without it, you’re not technically applying one of the main reasons why you established a trust in the first place, which is to keep your asset out of the pricy probate court system in the event that one or both of you pass away.
Remember don’t forget to fund your living trust, you need to transfer all your assets into the trust.
What occurs if the title is not properly transferred into the trust? Could it be true or not?
This occurs frequently. Many years ago, I had a client who experienced this. They had created a living trust, followed all the necessary procedures, and placed all of their properties and assets into the trust. However, throughout the years they continued to refinance. The bank demands that the title be transferred from the trust to the person’s name. They, therefore, entered their name. Although they completed the refinance, they ultimately forgot to add the property back to the trust.
They believed that everything was alright as the years passed. When the parents passed away, the children had to take care of everything. They understood that the assets were not held in the trust. As a result, it had to pass through the legal system. The children, the parents’ beneficiaries, remained the legitimate heirs to the estates, but probate was required.
Fortunately, California has a petition known as the Heggstad petition. Basically, it is employed when a piece of real estate or other asset is left out of a deceased person’s living trust.
Proving to the probate court that the deceased wanted to add the real estate or asset into their living trust before passing is a quick process. However, hiring an attorney to draft the petition would add to your expenses.
The main message is to always account for your assets. Don’t forget to put your assets into the living trust. That is my walkthrough on how to fund your living trust and what happens if you forget.
I hope you learned something from this blog. If you have any further questions, please don’t hesitate to contact me at firstname.lastname@example.org or 650-255-1511.
if you’re also interested in knowing about the Benefits of Prop19 and How to transfer your property tax if you are 55 years or older you can check out this video: The Benefits of Prop19 | Property tax transfer