Moving Property In and Out of a Living Trust [VIDEO]

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Hi, my name is Attorney Robert Vaksman with Vaksman Khalfin, PC. Today we’re going to talk about how to move property in and out of your living trust.

For most folks, a living trust estate plan is going to be the most effective planning tool that they can provide for themselves and their heirs. Just as a bit of a recap– we do have some other videos that you can take a look at but as a bit of a recap, you can basically have a will-based estate plan or a living trust-based estate plan. In most situations, a living trust-based estate plan is going to be the most effective tool specifically because a will is simply a set of probate instructions for a probate court judge, whereas a living trust is effective immediately, it’s private, it allows you to bypass probate for any assets that are held within it.

Those are some of the quick rundown benefits but in order to take advantage of the benefits of a living trust, what you need to make sure to do is fund your living trust. What funding is that specific process is moving assets that you currently own in your own name into the name of the trust. For example, if your trust name is the Sally Smith 2008 Revocable Living Trust, then Sally Smith needs to make sure that if she currently owns real estate and it’s in her personal name, Sally needs to move that real estate in the case of real estate using a Trust Transfer Deed into her name.

Once that transfer is complete, no longer will Sally own that asset but the living trust will own that asset. What’s important to note here is that Sally will still have complete control of the asset since in 99% of the situations when you’re setting up a revocable living trust, you’re going to be the initial trustee. Remember, trustees are the folks who manage assets. Sally, in this case, would still be the trustee, manager of the assets. In most 99% of situations, Sally is also going to be the initial beneficiary. Really, when you’re setting up these living trusts, you start out as the trustee, you start out as the beneficiary. You continue to retain management and control of the assets.

Now, with regard to moving assets and other property in and out of a living trust, it’s really different for different asset types. I mentioned real estate. In the case of real estate specifically, you want to use a Trust Transfer Deed. For example, when our firm creates an estate plan, a Trust Transfer Deed is always included. What that does again is it transfers real estate from the person individually to the person’s trust. For different asset types, there are different recommendations. I suggest you speak with your attorney with regard to the specific recommendations in your situation. Having said that, I’ll give you another example. For personal property, an estate plan should usually include a personal property memorandum.

In that personal property memorandum, what you’re doing is saying, “I want my personal things–” Your furniture, a Picasso, hopefully you have a Picasso, and you are saying that all those personal belongings are by virtue of you signing that personal property memorandum, they magically go into your trust by virtue of that memorandum. Now, with other asset types, for example, maybe an investment account. Let’s say you have an investment account with Schwab or Vanguard, it really might be as simple as a one-page form. In that one-page form, you’re going to specify that the ownership is changing from you personally to the name of your trust. If you have any questions please let us know, we’d be happy to answer them for you.

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"You will not be disappointed" John M.R. - Harrison, NY
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John M.R. - Harrison, NY