An individual may create a living trust and then neglect to transfer his or her assets into it. As noted by Kiplinger’s Personal Finance, your property does not automatically belong to the trust; you need to place your funds and properties in it and regularly audit its contents.
After creating a living trust, you may add or remove assets until you die. After your death, your living trust becomes irrevocable and may not change. Properties that did not transfer may require settling through probate court, particularly if you did not include them in a will.
Which homes may I need to transfer to a living trust?
Your primary home, vacation home and rental properties may all transfer to your trust. By not transferring your primary residence, however, you still have time to plan for future possibilities. If you intend to refinance your home, a mortgage lender may require removing the trust as its owner. By placing your name on the deed, you may have options to refinance your residence.
Which financial assets may I transfer to my trust?
Your bank and investment accounts may allow you to record your trust as owner. By reviewing your statements, you may verify which accounts transferred successfully into your trust. If you prefer to keep yourself listed as an account’s owner, you may add an heir or an individual as a transfer on death beneficiary. As described by SmartAsset.com, by naming an individual as your TOD beneficiary, he or she may receive any remaining assets in your accounts when you die. TOD accounts generally bypass probate court.
Without transferring assets to your trust, your heirs may find themselves in probate court. You may instead retitle your deeds from your name to your trust. Some financial accounts also allow you to add a TOD beneficiary, which may help to avoid probate.