How do I put property into a living trust?
UPDATED: February 20, 2013
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Living trusts are legally-designed instruments meant to remove ownership from the creator of the trust, thus helping them avoid probate court proceedings. In order for a living trust to be considered valid, it must contain the creator’s property. This means that property must be transferred or put into the trust by removing ownership from the grantor and placing ownership in the trust.
Placing Real Property Into the Living Trust
Real property is everything from your family home to the rental properties you possess. Basically, any physical piece of land is considered real property. Real property is very valuable and so it should be placed into the trust to avoid probate. In order to put real property into the living trust, draft a new deed, listing the trust as the owner. Submit this deed to the county recorder’s office for filing and you’re done.
Transfer Businesses to the Living Trust
Believe it or not, the partnership you own is actually considered valid property with very valuable assets. In order to ensure its value does not become public knowledge in probate, you will need to transfer the business to the living trust. In order to transfer the business, obtain the proper business filing form from your state’s business office and fill out the paperwork, listing the trust as owner of the business. File this form with the business office for official recording.
Money Management Portfolio
Everything from stocks and bonds to brokerages and money market accounts are all very valuable and should be placed into the living trust. Transfer these assets by contacting the bank or agency in charge of them and requesting the transfer form. Fill out the form, listing the owner as the trust and send the forms back in. Many of these organizations may also require that the documents be notarized for accuracy.
Intellectual Property May Be Put in Your Living Trust
Often overlooked, any patents, copyrights, and royalty contracts are also highly valuable assets. In order to ensure they do not pass through probate, or become forgotten, transfer ownership rights to the trust. Paperwork for this transfer can be obtained through any copyright or patent attorney and involves contractually transferring the rights.
If you have a gold collection, family heirloom jewelry, valuable artwork, an antique armoire, etc., all of these assets should be placed into the trust, as their value may be too great to avoid probate. The typical way of transferring this property is to place it onto the trust’s property list and secure it in a safe deposit box under the trust’s name. Large items can be kept in the family home.
What Not to Deposit Into the Living Trust
Certain items should not be placed into the trust, either because they are not of very great value or because they are a transient asset that may not be in your possession at the time of death. These items include:
- Personal Checking Accounts: Instead of placing the checking account into the trust, leave instructions and the account number in the trust document for pouring the remaining funds into the trust after your death.
- Cars: Cars are below the probate value requirement and may not be in your possession at the time of death. Also, most insurance companies refuse to insure a car that is owned by a trust.
- Retirement Accounts: These accounts typically have a designated beneficiary option. The trust cannot own the accounts while you are still alive. Instead, name the trust as the beneficiary. The funds will be placed into the trust at your death.