Transferring Assets into a Trust

Introduction

• Importance of transferring assets into a trust for protection and estate planning.
• Trusts help assets pass to beneficiaries without probate.

Key Concepts

• Changing Title: Necessary to put assets in the trust's name.
• Trustees: Hold title for beneficiaries.
• Naming Trusts: You can choose any name, not registered like LLCs.

Setting Up Trusts

• Title Transfer:
  • Trustee's name and trust name should be on the title.
  • Two ways to title assets:
    • Trustee's name first, then the trust.
    • Trust name first, then the trustee.
  • Avoid clouding title: Ensure trustee's name is listed.

Transferring Real Estate

• Use warranty deeds, not quitclaim deeds.
• Process:
  • Deed from individual (e.g., Stacey) to trustee of the trust.
  • Include trust name and date.
  • For investment property, consider a land trust for anonymity.
  • For personal residence, use a living trust for estate planning.
  • Ensure property avoids probate.

Business Interests

• LLCs and Corporations:
  • Avoid probate by transferring to a living trust.
  • Use an assignment to transfer membership interest.
    • Include trustee's acceptance.
  • Optionally restate operating agreements to show trust as a member.
  • Permitted transfers in operating agreements can simplify process.

Investment Accounts

• Open new accounts in trust's name.
• Process:
  • Journal entry assets into new account under trust.
  • Checks do not need trust name; specify preference to institution.

Entities Holding Assets

• If assets are in LLCs, transfer the LLC into the trust, not individual assets.
• Owning entities provides flexibility in moving assets without changing titles.

Personal Effects

• Ownership by Possession: No titles for personal items.
• Use a Personal Property Memorandum to indicate transfer.
• Avoid detailed Schedule A; simple memorandum suffices.

Conclusion

• Covered four main asset types for trust funding:
  • Real estate
  • Business interests
  • Investment accounts
  • Personal effects
• Action: Consider professional advice for setting up or funding your trust.
• Free strategy sessions available for assistance.

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