- Hey, you ever wondered how you transfer assets into a trust via living trust or a land trust? While in this video I'm going to be breaking down various types of assets and how you actually transfer them into your trust to get them held by that vehicle, to make sure they're protected or if it's for estate planning purposes, that it'll pass on to your beneficiaries without the need for probate. All right, let's get started. Okay, so when it comes to transferring an asset into the trust, what you're saying is that you need to change title on the assets to put them into the name of the trust so that the trust holds the assets. And this is key because if title to the assets that you currently hold are not transferred to the trust, then they do not exist in that trust. And I see this a lot with people when it comes to creating trust. They have a trust here and let's say it's a piece of property, well that trust is never listed on title to this property. Therefore, when this document here gets passed on to another individual, they take the document, they take the trust, but it has zero assets inside it. And that's why funding trust is so important. So many people set up trusts and they never transfer their assets into them, so they get no benefit from having that trust. So here's what you have to look at. When it comes to funding assets in the trust, before I talk about real estate and business interests and investment accounts and personal effects, I just want you to understand what we're doing. So when you set up a trust or you transfer title of the trust, what you're doing is you're transferring to the trustee of that trust because trustees hold title to assets for the benefit of the beneficiaries or what we call the trust beneficiaries. So you actually transferred legal title or equitable title to the trustee of the trust. And so what that implies is that the name of the trustee and the name of the trust will be listed on title to that asset. So you would do it as follows. If I was a trustee of a trust, it would come to Clint Coons trustee of the Green Frog Trust. Now that's another thing, you can come up with any name you want for your trust, okay, the thing about trust and naming them is that they're not recorded anywhere. I mean there isn't with the Secretary of State that you have to go and make sure the name is available in order to use it like you would with the LLC or a corp. With trust, you can just come up with any name that suits your fancy. So in this example, I would set up the trust to hold titled assets in the name of the trustee, Clint Coons, the trustee, okay, of the Green Frog Trust. Now you can do it the reverse as well. So sometimes when we transfer assets in the trust, if we don't want the trustee's name appearing first, we can move all of this information right here and put it at the end. So title could be transferred as follows to the Green Frog Trust, Clint Coons, trustee. Like that. Now either way is sufficient to title assets, but you have to use one of those. Sometimes people say, well, I'll just put on the Green Frog Trust on there and I'll transfer assets into that trust name. The problem with that is you'll probably cloud title to your property, unless you're working with an attorney when it comes to selling the asset or transferring the assets on and you have a longstanding relationship, this could create a cloud on title for you that may be a problem in the future. So they want to see the trustee's name listed there. Okay, so we've nailed how you or how the trust is set up to accept title to real estate or assets. So let's talk about transferring real estate into the trust. So if I have real estate and I want to transfer this into either a land trust or I want to transfer it into a living trust, this is my living trust, this is my land trust, either way, it's going to be the same process. What I will do is I will deed it from the individual's name. So let's say the individual's name here was Stacey. So what Stacey's going to do is she's going to deed it to the trustee of the trust with the trust name there. So that would be done via a warranty deed. Do not use quit claim deeds to do this. Use warranty deeds 'cause you do not want to jeopardize your title insurance. So Stacey would then transfer the property. Let's say we're using it the first way and I was serving as a trustee to Clint Coons, right? Esquire trustee of the, I'm just going to put GF Trust, okay, Green Frog Trust. And then you have the trust date as well on there. So she would transfer from her name to my name as trustee of the trust. Now generally speaking, I wouldn't be the trustee, what I refer to as a nominee trustee of a living trust. So I would just do that in a land trust scenario. But if it's not investment property, 'cause in this example here, this is Stacey's rental house. So she's probably going to want to transfer it into a land trust and there's lots of reasons to do that. I have plenty of videos on that topic. So there she's going to use a nominee trustee or she may use a Wyoming limited liability company, both of which give her anonymity so the title no longer shows up in her name. So people don't know that she owns this asset. Now, if she was transferred into her living trust, there's a scenario where say it's your personal residence, many times you're going to be your trustee of your own living trust 'cause it's set up for estate planning purposes. I'm the trustee on my living trust. So there, I'm going to transfer it from Stacy to Stacy as trustee of the Green Frog Trust. Let's assume, of course you don't want to have a land trust with the same name as your living trust. You always want to have different trust names, but then she would just transfer it to herself as trustee of this trust and that would accomplish it. Now this property, if she did that, would be held by her living trust for estate planning purposes. And when she passes away or she's incapacitated, the property would avoid probate and then be placed in the hands of her successor trustee or beneficiaries when it's ultimately distributed out to her. So real estate, what you're doing is you're deeding property from your name into the trustee's name and the trust name together. That's how you handle real estate. Do not allow real estate to reside in your personal name if you've set up a trust, because if it's investment real estate, well there's no asset protection there. When it sits in your own name, you'll be sued. If it's not investment real estate, it's your residence. Or if you're not using a structure for your investment real estate, you don't want to go through probate with that asset. You want to make sure it avoids probate. So that's why you have a living trust you get into there. Okay, so the second thing I'd like to talk about are business interest. How do I move a corporation, an Inc or maybe an LLC that I've set up? Because right now my LLC, if you were to look at my operating agreement, this LLC states that Clint is the member of the LLC and I have this trust down here. This is my living trust, okay, that I set up for estate planning purposes because I want to avoid probate. Well, if I keep this LLC in my own name where I am listed as the member of that LLC, then when I've passed away, this LLC has to go through the probate process in order to get it passed on to my beneficiaries. And just think about it, maybe your beneficiaries are going through a divorce, maybe they're involved in a lawsuit. Now that LLC could be party to that, be brought in and be something that a creditor or a disgruntled ex-spouse could try to attach. So what we want to do is we want to make sure that our business interests are funded, is what we call this, funded or transferred into our living trust. And there's a really simple process here in order to move business interest into a living trust, you do it via an assignment. Okay, so what this means is that you fill out a piece of paper where you would state I Clint Coons hereby assign 100% of my membership interest in LLC. Let's call this Red Box LLC, Red Box LLC, to the living trust. You sign that document and then you have a trustee's acceptance that goes with it where the trustee of the living trust accepts that assignment of personal property or this membership interest in the LLC and you're done. Now this LLC is held by your living trust by your completing that assignment of interest. Now, when I'm assigning interest in business entities, if a client comes in and the client has multiple business interests, I can take care of it all in one form, one document and transfer all those business interests into their living trust for them. So transferring over the LLCs and the business interest is really, really important. It's something many times it gets overlooked and they'll get transferred in there. Now the operating agreement itself, it still says that you are the member of that LLC even though you've assigned it. So what do you do there? Well, the first thing that you may want to do, it's up to you, it's optional, is you could restate your operating agreement and by restating the operating agreement, you'll list your living trust as the member because you're no longer the member, now your living trust is. And so your name would be removed on that new operating agreement and the trust would sign on. Now, the problem I have with that and restating the operating agreement for an LLC with a corporation, this does not matter, but this really pertains to LLCs, is that when you restate that operating agreement and you show your living trust, if you're ever trying to get a loan or you're dealing with third parties with that LLC, 'cause maybe you know it owns rental real estate or it's a business and the third party asked to see a copy of this operating agreement right here, they're going to look at that operating agreement, they're going to see the living trust and they're going to go, oh, we need to see a copy of your living trust. So I prefer to leave my name on my operating agreements even though they're held by the living trust via that assignment of interest. So when someone's looking, they don't see the living trust and try to drag that into the back office attorney that needs to go through and scrutinize all the documents to justify his hourly rate. I prefer not to do that. So I don't change my operating agreement. Now the last thing I'd leave here on business interest, that is also something to look at. These are not your LLC interests, maybe that it's an LLC, a syndication that you have an interest in, or maybe you're involved in someone else's LLC, you need to make sure that the operating agreement allows you to make this assignment. Or is there a certain process you must go through in order to assign your interest? And so this really applies to individuals who maybe don't even understand what they're doing when they're setting up their own LLCs. For example, in our limited liability company in our operating agreement, we have a provision in there that allows for this type of an assignment over to a trust without the need to get the approval of the other members in the LLC or the manager or any third party. It's what we call a permitted transfer. So you want to make sure that when you're assigning an interest in your LLC, that you have a provision in there that allows this type of assignment without a procedure that you must go through. And the reason I say this is because if it ever got challenged, someone could say, hey, that trust never owned that asset because you didn't go through the right process. And there's been plenty of cases where creditors have challenged these types of transfers and they've unwound them because an individual did not understand that there were certain hoops they had to jump through in order to make the assignment effective. Alright, so the third thing that we want to look at are your investment accounts. So bank accounts, all right? If you have an investment account, like a stock account, those types of things, CDs, treasuries, any financial account that your name is associated with, in order to get that into the trust, you cannot use an assignment. You actually have to open up a new account under your trust name. So if it was Stacy and she had a bank account, she had a stock account, CDs and treasuries, she would go down to each of the institutions where she'd set up these accounts and she'd say, listen, I need to create a new account and I would call on my new account. She'd say it's the Green Frog Trust, okay, Stacy, as trustee, it depends on the institution, how they're going to set this up. But the fact of the matter is you would need to open up a new account and then they will roll all your positions into that new account name. Now obviously if you watch my other videos, you're probably saying, wait a minute, Clint, you've told me that the investment account, CDs and treasuries should be in a Wyoming LLC. That is correct, and I will come back to that in a moment. But if you have not done that yet, then you should, if you've set up a living trust, get those assets transferred in living trust by opening a new account under the name of your trust and then having them journal entry those assets over to that new account. Same with the bank. Now the thing about setting up these accounts, you know, Green Frog Trust, your checks, if you have check writing privileges on these accounts, will not have to have Green Frog Trust listed on them. So don't let that be a deterrent. You're thinking, I don't want people to know I have this trust. You can tell the institution how you want your checks to read, you know what will be listed on the check. So these statements will come to the trust name, but the checks can be something different. So if you've already set up a trust and you have multiple accounts and you're wondering, hey, are my accounts in the name of my trust? Go look at your trust statements, all right? Log in online. See when you log in online how the account title reads, if it doesn't read the name of your trust, then you have not yet transferred that asset into your trust. Okay, so what I'd also like to explain to you, when I talked about those Wyoming LLCs or the real estate, when you're transferring business interest in. So let's say here's a Red Box here that owns a piece of property that's owned by a Wyoming LLC and maybe I have another Wyoming LLC over here that holds my investment accounts, all right? It's all inside of there. And currently I own these two LLCs and I've set up a living trust here. And you've watched this video to this point and you're like, okay, so I need to deed my property into the trust in order to get that in. And I also need to transfer my interest and I need to open up a new account. I've seen this happen before. People get confused on this subject. I am breaking down assets that you hold in your name, right? So this is what we're referring to here, transferring assets that your name appears on. Now if you look here, my name does not appear on this piece of property. It's in the name of the LLC. Now, do I own this red box? No, I do not, I don't own the red box LLC. So what that means is I don't have to deed the property because I don't own it and I don't need to transfer the red box because I don't own that either. The property is owned by the red box. The red box is owned by the blue box, and I own the blue box. So the only assignment is this. And by moving that blue box into this living trust down here, I'm transferring everything right here. The same thing works with your investment accounts. You don't need to change all the investment accounts if they're already in the name of your LLC. All you have to do is move the LLC. And this is why I'm a strong proponent of using business entities to hold assets because by placing the assets inside of these entities, once they're set up, you can move the entity around. And with it goes all those assets that you placed inside of there, you don't need to keep changing and opening up new accounts and moving assets back and forth. Okay, so the last point I'm going to cover here has to do with personal effects, right? So your jewelry, things like that. Maybe your guns, you want to to get those into the living trust. You've got a nice sofa, recliner, lounger that people, that your kids look at and they say, I really want to have that dad. Whatever it is that you have from a personal effect standpoint means there is no title to these assets. Okay? So how do you determine ownership of personal effects? It's by physical possession. So when it comes to personal effects, what we want to do here is we will typically prepare to move these personal effects into a trust like this. We'll do a personal property memorandum, a PPM, personal property memorandum, and the personal property memorandum, it lists generically out all different types of assets, any type of personal property you hold, jewelry, clothing, all these personal effects. By signing this memorandum, I indicate my intent to transfer the ownership into my living trust. So you should have something like that. Some people will talk about a Schedule A where their living trust has this additional schedule and they'll list out all their individual assets. You don't have to do that. That is time consuming and mind numbing to go through and list all these things out. You probably don't even know what you have. I mean, I'm thinking about this right now. How many skill saws do I have in my garage right now? I can think of three, but I may have four. So if I don't list all of them in the model numbers and they don't reside in my living trust, that's just ridiculous. So by just doing a personal property memorandum that's simple, transfers all those assets in, you don't need to do the Schedule A that you'll see in more of the antiquated approaches to putting together a living trust, listing these things out. It's more of an idea just to let people know what you have. That's why people use schedule A's in my opinion. But anyways, that's it. Living trust, land trust, it doesn't have to be more complicated than that. I've hit the four main assets that people need to get into the trust. If you're at that point right now and you're wondering, hey, how do I fund my trust? Give us a call. In the show notes below we have a link to a free strategy session. Click on that link. It'll set up a strategy session with one of our advisors and we'll walk through it. Either setting up a living trust if you don't yet have one, and explain to you if you do have one, how we can help you assist you in transferring your assets into your trust. Guys, if you like the video, be sure to hit the like button and I wish you the very best with your investing.