The Purpose of an Estate Plan?
The main reason to set up an estate plan is to ensure who will receive your possessions and valuables and what part of your estate will go to certain people. Estate planning also allows you the ability to name your children’s guardian in the event of your premature death. Another reason for estate planning is to reduce taxes on what you leave behind. Estate planning also minimizes the chances of family legal battles over your assets.
How You Can Protect Your Assets
Estate plan funding is a critical component of any estate plan because it can ensure that your assets are properly allocated and that your wishes are carried out.
By setting up a trust, you can ensure that your assets are protected from creditors and other claims, and that they will be distributed according to your wishes upon your death.
A trust fund is a financial instrument used to manage your assets. It is typically established by a legal document and managed by trustees who are responsible for investing and administering the assets according to the instructions of the grantor.
Funding a Living Trust
It might be a good idea to set up an estate plan with revocable living trust (RLT) instead of relying solely on a will, joint ownership, or beneficiary designations as their estate plan.
A revocable living trust is an important tool for protecting your assets and providing for your loved ones. It can be a complex process to fund a revocable living trust, but with the right guidance and knowledge from an estate planning attorney, it can be done successfully.
Funding a trust is the process of transferring assets from an individual or entity to a trust. It is done to protect those assets from creditors and other legal issues. It also helps in minimizing taxes and providing more control over the assets. Funding a trust involves transferring ownership of the assets, creating new documents, and ensuring that all the necessary paperwork is completed correctly.
What Assets Can Be Transferred to My Trust?
When considering what assets to transfer to your trust, it is important to carefully consider the type of asset and whether it is allowed by law. Assets that can be transferred to a trust include real estate, stocks, bonds, bank accounts, life insurance policies, and other personal property. It is also possible for certain types of digital assets such as cryptocurrency or intellectual property rights to be transferred into the trust.
You may not be able to transfer all your assets to your trust. Retirement plans, such as individual retirement accounts (IRAs) cannot be owned by your trust while you are living. However, you can change the beneficiary designation for your IRA to your trust as primary or contingent beneficiary to receive retirement benefits after your death. Check with your estate planning attorney to determine what assets are allowed to be transferred to your trust in your state.
Why Is it Important to Properly Fund My Trust?
Remember, the purpose to establish an estate plan with a living trust is to avoid probate when you pass away. You may have set up a great trust, but until you properly fund that trust you won’t avoid the probate process. You must transfer your assets to the trust by changing property titles or provide for transfer by beneficiary designation. Your attorney can help you catch any asset you may have forgotten about, but you are ultimately responsible for funding your trust.
Although funding and transferring your assets into a trust may be done by you, it is best to consult with an experienced estate planning attorney.
Winton Law El Paso P.C.
1533 N. Lee Trevino Suite 201
El Paso, TX 79936
Hours: Monday – Friday 8:00AM to 5:00PM by appointment only
Disclaimer: Every effort has been made to ensure the accuracy of this article at the time it was written. It is not intended to provide legal advice or suggest a guaranteed outcome as individual situations will differ and the law may have changed since publication. Readers considering legal services should consult with an experienced lawyer to understand current laws and how they may affect your case.