Ways to Fund a Living Trust in Kentucky
There are many estate planning tools at your disposal. If you opt for a living trust, you’re in good company. Many people choose to create a living trust to help their assets pass to loved ones without the stress of probate. Living trusts come with a whole host of benefits, and once you’ve established it, you can fund it with a wide range of assets.
Wondering about the next steps in your estate planning journey? The team at John H. Ruby & Associates is here to help. Call our team of Louisville estate planning attorneys at 502-373-8044 to set up a consultation now.
Transferring Real Estate
For your trust to distribute assets upon your passing, the assets you want to pass along must be owned by the trust. Real estate is often transferred to a trust and then transferred to the beneficiary via a deed. There are several types of deeds used to transfer real estate in this way. It’s important to note that transferring real estate into and out of a trust can incur fees and taxes, so it’s important to plan for this if you don’t want your beneficiaries to absorb these costs. Your estate planning lawyer can help you with this.
Vehicles are another type of asset requiring a deed for transfer. If the vehicle is owned outright, this is a fairly straightforward process. If the vehicle has a lien on it, you’ll likely need your lender to sign off on it.
Using Bank Accounts
Transferring bank accounts, investment portfolios, and other financial assets into a trust can streamline the process of distributing these funds when you pass away. In most cases, this simply involves transferring ownership of the account from the individual to the trust. If you have diverse financial assets, such as investment portfolios, it’s important to consult with your attorney and a financial advisor to protect these assets throughout and after your lifetime.
If you plan on funding your trust with retirement accounts, it’s crucial to work with a financial planner throughout this process. Retirement accounts can incur heavy penalties and taxes if not handled appropriately during transfers.
The Role of Life Insurance
Life insurance is an important part of many people’s estate plans. Not only do these plans provide funds for your final arrangements, but they can also go on to change your loved ones’ lives. You can name a trust as the beneficiary of your life insurance, which lets the policy money be paid out to the trust when you die. It’s essential to consult your estate planning attorney about your policies—policy restrictions and designations vary between companies, and addressing these concerns ahead of time can help you avoid issues down the road.
Many people transfer other assets into a trust—assets that don’t necessarily have a straightforward and predetermined method of transfer. For example, you may wish to transfer jewelry, artwork, or collectible items into a trust. This may seem like a substantial amount of work, but it’s much less work than your loved ones taking those assets through probate after your death.
The first step in transferring personal property to a trust is inventorying everything. Ensuring that everything is accounted for and properly documented can make this process much easier. After that, you can formalize the transfer of property into your trust by listing the property in the trust document and specifically transferring those assets into the trust.
If you have any insurance on any of the assets, update your policies to name the trust as the owner. This is common for jewelry and artwork. Your trust attorney can assist with documenting the transfer to ensure that there are no discrepancies or disputes when it comes time to distribute the assets.
There are many ways to fund a living trust. By working on your unique estate plan with an attorney, you can protect your assets and make it easier for your beneficiaries to access them.
Start Your Estate Planning with John H. Ruby & Associates
When you’re ready to start your estate plan, the team at John H. Ruby & Associates is here for you. Contact our Louisville lawyers online or call us at 502-373-8044 to set up a consultation now.