Adding property to your living trust

A living trust is a versatile estate planning tool that allows you to place assets of your choice into a trust for your benefit while you're alive. Upon your death, those assets then transfer automatically to your chosen beneficiaries without having to pass through probate.

Adding property to your trust—also called funding the trust—is an essential part of creating a living trust. To fund a trust, you must transfer ownership of assets to it. But once your trust is set up, it doesn't mean you can't make any changes to it.

A living trust is indeed "living" in the sense that you can add or remove assets from it provided you do it the correct way.

Tranfer of ownership of real estate to a living tTrust

Many people choose to have their home included in a living trust. To add your family home or any other real estate you own to a trust, you must change the property's title so that the trust is the new owner.

You must register this change in the county where the property is located. Generally, most fees involving a usual property title transfer are waived so long as the grantor (creator of the trust) and trustee are the same person.

Transfer of ownership of bank accounts, cash-related accounts, or securities

Cash-related accounts include bank accounts, brokerage accounts, savings accounts, and certificates of deposit. To transfer such assets into the living trust, you must place them in the name of the trust.

You can often request this change in person at the location of the account. Alternately, you may be able to file a form supplied by your bank or brokerage firm, which requires notarization.

Transferring stocks, bonds, or other securities requires a stock power form, which you can obtain from the bank, brokerage firm, or a stock transfer agent. You must have this form notarized or have a medallion signature guarantee, which verifies your identity in the security transfer process.

Removal of property from a living trust

You may also choose to remove property from a living trust at your discretion. The process for removal is essentially the reverse of adding it. That is, you must change the asset's title back to you as an individual instead of you as the trustee of the trust.

Depending on whether you are adding or removing property from a living trust, you should revise the property schedule to include or exclude the asset. This change may also require you to amend the trust document regarding beneficiaries and compile an "amended and restated" version.

Note that state laws vary on creating and managing living trusts, so it's important to understand what is required in your jurisdiction. This is especially true if you move and need to make changes to your trust that involve adding or removing assets involving title changes.

Consulting with an experienced estate planning attorney is highly advised to ensure that your trust is accomplishing your goals.