Creating a trust is an important step in planning your estate and securing your loved ones’ future. However, establishing it and signing the document is only the beginning. The next crucial step is transferring your intended assets from your name to the trust’s name. This process is called funding the trust.
Failing to fund your trust properly can lead to legal issues and even probate, ultimately undermining your estate planning efforts. With this in mind, what assets should you definitely include in your California trust?
Real estate
Your home and other real estate properties are often your most valuable assets and transferring them to your trust is crucial. If you own a vacation home or investment property, consider including these as well.
Funding these properties into your trust typically involves drafting a new deed that names the trust as the property owner. This effectively shields them from probate, paving the way to a smooth transfer to your beneficiaries.
Bank and investment accounts
Transferring your bank and investment accounts to your trust helps avoid probate and ensures your beneficiaries have quicker access to these funds when needed. This includes your checking and savings accounts and any investment portfolios you may have.
Business interests
If you own a business, transferring your ownership interest to your trust can be a wise decision. This step helps ensure a smoother transition of ownership if something happens to you. This can be particularly important for small business owners in California, as it can provide continuity and stability for your company even in your absence.
From assets to legacy: The importance of trust funding
Funding your trust transforms it from a mere legal document into a powerful tool for preserving your legacy. By funding your trust correctly, you are not just avoiding probate – you are charting a roadmap toward your family’s future financial security.