Revocable living trusts can be one of the most useful parts of an estate plan, but only if they’re properly funded. Many people establish a living trust for their estate, but most will also fail to properly fund it – often resulting in an unintended probate process that may distribute property to unintended beneficiaries. In Washington State, the probate process usually takes a whole year – and can be a difficult and costly process. With proper funding, however, a revocable living trust can help avoid probate, pass on assets, and much more.
How to Fund Your Revocable Living Trust
The process of transferring assets into your trust, for most assets, will consist of retitling those assets into the name of the trust. Most financial institutions should be familiar with this process and will be able to facilitate the title transfer. In some cases, such as the transfer of real estate, the financial institution may request a copy of the trust, or a shortened “certificate of trust,” to ensure that the title will be transferred properly. Quitclaim deeds are used to transfer any real property to a trust, as it transfers ownership quickly and easily. Additionally, an excise tax affidavit must be filed with the county in order to process your quit claim deed. Harbor Law Firm can take care of the whole process of funding your trust with your Washington real estate.
For bank accounts and taxable (non-retirement) accounts, you can either re-title the accounts into the name of your trust or you can name the trust the beneficiary of these accounts. Your financial institution usually has a form to fill out and can assist you with the process. For retirement accounts, you should NOT re-title them into the name of the trust as this can have negative tax consequences. Planning for retirement accounts can be complicated and should be discussed carefully with both an estate planning attorney and your provider to find the best solution for you.
Whenever you gain new assets, it’s essential to transfer them as well. If a significant amount of assets are left out of the trust, part of your estate will likely be forced into probate, even if you’ve transferred most of your assets into the trust already. For items without title documentation such as collectibles or jewelry, Washington state allows the use of a Personal Property Memorandum. This a list that you can update anytime you’d like with items of “tangible” personal property, such as jewelry and other family heirlooms, and direct who you would like them to be given to. Working closely with an experienced estate planning attorney is always recommended to ensure that your assets are properly handled and your trust will remain effective when needed.
Harbor Law Firm is here to help make funding your revocable living trust easier. We can assist with the creation of your trust, as well as transferring your real property. The process is made simpler with our provided documentation on what you’ll need to do, while we handle the rest. To get started with your own revocable living trust, contact us today at (888) 335-2815 or through our website for a free consultation.