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Transferring assets is a vital part of trust preparation

On Behalf of | Oct 22, 2020 | Trusts

Many California residents believe that using a trust as part of their estate plan is wise. This line of thinking can often allow individuals to take advantage of the many benefits a trust can offer. However, it is important to remember that trust preparation goes beyond simply creating the trust and that assets need to be put into it.

In some cases, individuals will transfer some assets to a trust when they create the account, but in other cases, they may intend to transfer assets later but forget or otherwise not get around to doing so. In the latter case, a trust that has no assets transferred into it is useless. If a person leaves assets out of a trust or forgets to put them into the account, those assets would be addressed through the probate process.

Because forgetting to transfer assets at the time of the trust creation or forgetting to transfer assets acquired later can easily happen, creating a pour-over will could help. This document would indicate that any qualifying assets not included in the trust at the time of a person’s passing would transfer to the trust as instructed in the will. However, because the assets were not included at the time of the person’s death, they would still need to be probated and then moved into the trust after that process ends.

Though trusts can offer much help when it comes to estate planning goals, that help can only come when trust preparation is completed correctly. If California residents want to ensure that they use their trusts as intended to reap the benefits, recognizing possible ways they could go wrong is important. Fortunately, they could go over potential mistakes, ways to avoid them and how to create the best trust plan for their circumstances with experienced attorneys.


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