Probate is not an easy thing to go through. It’s tedious, time-consuming, and stressful, especially for a family that is already grieving the loss of a loved one.
To avoid the stress of the probate process, many individuals choose to establish living trusts as a part of their estate planning strategy. The probate process can be bypassed through this, and asset transfer becomes much more efficient.
But it’s not quite that simple. To fully realize the benefits of a living trust, you need to fund it properly. Let’s look at how to fund a living trust after probate.
Living Trusts: What Are They?
A living trust can be a valuable tool for estate planning. In legal terms, it is an entity into which you can transfer ownership of your assets during your lifetime. The person who creates the trust is known as the grantor and is typically named as the initial trustee so they can retain control over their assets. They will usually also designate a successor, who manages their trust in case they ever become incapacitated or pass away.
The biggest advantage of a living trust is that it lets you avoid probate. Probate distributes a deceased person’s assets according to their will and is supervised by the court. The process is timely, costly, and public, which can be stressful for the family involved.
On the other hand, a properly funded living trust lets you transfer assets to beneficiaries more efficiently and is a private process.
Funding Your Living Trust
To get the benefits of a living trust, you need to first fund it properly. In this context, ‘funding’ refers to the transfer of ownership of your assets from your name to the trust. Here’s how to go about it.
Create a Comprehensive Inventory
The first step in the funding process is listing all your assets. This includes any property you own, your bank and investment accounts, retirement funds, life insurance plans, possessions, and other important assets.
Be thorough with your documents because this will be the road map for the funding process.
Identify Assets That Should Be Funded
You don’t have to transfer all your assets into your living trust. Some assets come with their own beneficiary designations, life insurance policies, and retirement funds. These don’t need to be in your living trust, nor do assets with joint ownership or named beneficiaries.
Once you’ve listed all your assets, decide which ones should be funded into the living trust. Typically, you’d include the assets you don’t want going through the probate process. A Denver probate lawyer can advise you on the best course of action here.
Transfer Real Estate
Real estate is transferred into a living trust by changing the title from your name to the trust’s name. A new deed identifying the trust as the owner must normally be prepared as part of this process. The completed deed must be submitted to the relevant government office.
Re-Title Financial Accounts
You’d have to re-title assets like banks or investment accounts in the name of the trust. This is usually done through the financial institution. When you contact them, you can provide a copy of the trust agreement and complete their paperwork to carry out the process.
Update Beneficiary Designations
Look over the beneficiaries listed on any retirement accounts, life insurance policies, or other assets that have beneficiary designations. Ensure that your living trust’s beneficiaries or any applicable trust provisions are specified.
Transfer Personal Property
Assets like vehicles, jewelry, artwork, and other personal property should be transferred into the trust’s ownership. You can do this through a bill of sale or by updating ownership records as relevant state laws require.
Get Professional Appraisals
For some valuable assets like art collections or antique furniture, you should get them appraised before transferring them into the trust. This helps with taxes by establishing a fair market value and ensuring asset allocation among beneficiaries correctly.
Monitor Changes in Assets
After you’ve funded your living trust, you must be watchful of any additional assets you acquire. To ensure your trust is always properly financed, periodically examine it and review any needed changes. For example, you want to stay on top of incorporating new assets into the trust and make necessary changes to beneficiary designations.
Keep Accurate Records
Keep thorough records of transfers and adjustments to your living trust’s funding. This will help your successor trustee and beneficiaries navigate the trust administration process smoothly when the time comes.
The Benefits of Proper Funding
Properly funding your living trust after probate keeps your assets protected and distributed according to your wishes while avoiding the costs and delays associated with probate. Here are some benefits of funding a living trust.
Privacy
Unlike probate, which is a public process, the details of a living trust remain private. Your financial situation and the allocation of your assets are private.
Cost Savings
Probate can be costly, reducing the value of your estate due to court costs, attorney fees, and executor fees. You save money on these expenses if you avoid probate.
Timely Asset Distribution
A living trust allows for the quicker distribution of assets to beneficiaries than the traditional probate process, which can take months or even years.
Flexibility
Living trusts allow you to manage your assets while you are alive and guarantee they are dispersed following your precise wishes. A Denver estate planning attorney can help you with this process.
Bourassa Law Group Provides Legal Counsel for Funding Living Trusts
Working with an experienced estate planning attorney is highly recommended during funding. They can provide valuable guidance, ensure you understand the legal implications of asset transfers, and help you complete the necessary paperwork correctly.
Contact the Bourassa Law Group today to schedule a consultation with our dedicated estate planning lawyers in Colorado. We are here to guide you through the intricacies of the living trust process, offer expert legal advice, and get your trust funded properly.
Don’t face the probate journey alone—let us be your partners in securing your future. Reach out to us at (800)870-8910. Your peace of mind is our priority.
