Wills and Trusts, which are typically drawn up by us, as an estate planning attorney, are related inasmuch as they are both concerned with the distribution of assets. However, they have different functions. A will only goes into effect after you die, after which your precise instructions as to how your estate is to be distributed is carried out by the person, or persons, you named as the ‘executor’.
As opposed to this, a ‘living trust’ goes into effect as soon as it is created. It is managed by a trustee who, legally, holds all assets for the beneficiaries.
As an estate planning attorney, we can create a trust for you. At the time, your trust is drawn up you will need to decide whether it is to be ‘revocable’ or ‘irrevocable’. A revocable living trust simply means that you can change the terms should your wishes or circumstances change. On the other hand, an irrevocable trust cannot be changed, modified or even terminated without the beneficiary’s permission.
Funding Your Trust
However, it doesn’t quite stop at signing all necessary documents. All the assets that you want to be part of the trust have to be formally transferred into it. If you do not take this all important step and, in a manner of speaking, leave your trust ’empty’, the distribution of your property and assets will be controlled by the terms of your will. And, if you die intestate, i.e. without a will, the laws of succession in your state will decide who gets what.
There Are Several Basic Ways to Fund a Trust.
Transfer Ownership or Assign Items to The Trust
A trust can be made up of money, stocks and bonds, personal possessions, bank accounts, copyrights and patents, real estate, etc. Assets that do not have title documents, such as any jewelry, artwork, furniture, or heirlooms need to be individually listed and attached to the trust document. However, in the case of assets and property that have proprietary documents, new ownership documents, which show that the asset is now being held in trust, will have to be drawn up. In other words, the title or deed to certain assets, such as real estate, will have to be changed.
Note: Having the titles of cars or other vehicles transferred to the trust comes with unique challenges, so we encourage you to speak with us, as an estate planning attorney before making any decisions.
Purchase Items in The Name of The Trust.
You, or someone else, can also make purchases in the name of the trust. For example, should you buy a piece of property after your trust was created, you simply have the title and sale in the name of the trust.
Changing the Beneficiary of Certain Items
While it does not fund the trust, you can also alter the name of the beneficiary of certain items such as insurance policies and retirement plans to the trust. However, there may, in some cases be some adverse tax consequences. Once again, the wisest course of action is to discuss this in our estate planning attorney office before taking any steps.
We have both the knowledge and the experience to guide you through the often-complicated business of setting up a trust, and ensure your wishes are carried out exactly as you intended.