If you are considering creating a living trust, then you also need to understand how to move your assets into it. The technical term is funding the trust.
There are three principal options available to cover the different types of assets you might have.
You can make the trust the beneficiary
This applies to those assets that require you to designate a beneficiary – for example, health savings accounts, retirement accounts and life insurance policies.
You could make the trust the primary beneficiary. Or you could nominate someone else, such as your spouse, as the primary beneficiary and name the trust as your backup in case they die before you or cannot be traced when you die. Be sure to check the tax implications of either move.
You can change the title
This option applies to things where you are currently the titleholder, such as your real estate. You simply make the trust the titleholder. You can also use it with non-IRA and non-401K investment accounts and stock or bond certificates.
You can make the trust the owner in a legal document
With legal help, you can draw up a document to say that you make the trust the owner. This is useful for things such as artwork or heirlooms which might be in your house but are not registered as yours in any other way. You can also take care of royalties and mineral rights in this way.
A living trust is just one of many estate planning options available. Seek help to understand if you could benefit from one.