Creating a living trust document is only one step in the process of creating a living trust. Think of a living trust as a vessel that holds property. Without property, a trust is not created. Thus, finalizing a living trust, sometimes referred to as “funding” the trust, requires executing the trust document and transferring assets to the trust.
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Transfer any real property you own to your living trust with a grant deed. Determine how you currently hold title to the property by looking at the most recent recorded grant deed. For example, you may currently hold title as “Jane Smith, a widow,” or as “John Smith, a married man.” Fill out a new grant deed and include the way in which you currently hold title to the property as the grantor. Name your trust as the grantee. For example, if you currently hold title as Jane Smith, a widow, list “Jane Smith, a widow” as the grantor and “The Jane Smith Living Trust” as the grantee. Sign the deed before a notary and deliver it to your land records office for recording. Grant deed forms are commonly available at office stationery stores or through an online document preparation service.
Change title to any savings, money market and brokerage accounts to show that you now hold these assets as the trustee of your trust. For example, the new title to a savings account might read, “John Smith, as trustee of the John Smith Living Trust.” The financial institution will provide you with the form required to change title.
Name your trust as the beneficiary of any life insurance policies, annuities and retirement accounts. The asset holder will provide you with the necessary beneficiary designation form. List the beneficiary as “The Trustee of the Jane Smith Living Trust.” If you are married and contributed to a retirement account during the marriage, list your spouse as the primary beneficiary of the retirement account and the trust as the secondary beneficiary. Note that some institutions instead refer to a secondary beneficiary as a contingent beneficiary. If you are married, accumulated retirement earnings during the marriage and do not want to name your spouse as the primary beneficiary, contact an attorney.
Transfer your tangible personal property, such as furniture, furnishings, tools, jewelry and other items, to your trust by creating a transfer document. Include language that you transfer the following assets to your trust, then list the assets. You may list assets individually or use very broad language. For example, broad language might read, “Jewelry, clothing, furs, tools, household furniture and furnishings, sculpture, art, china, glassware, silverware, and all other tangible articles of a personal nature belonging to me, normally kept at my place of residence or elsewhere.” Sign your name to show that you are transferring these items to your trust, then sign your name a second time, followed by the word “Trustee” to show that you, as trustee, accept these items.
References & Resources
- Make Your Own Living Trust (8th Edition); Denis Clifford
- Guide to Wills and Estates (3rd Edition); The American Bar Association