Living Trusts

• your house
• other real estate
•  business interests
• stocks, bonds and mutual funds
• money market accounts
• brokerage accounts
• royalty contracts, patents and copyrights
• jewelry and antiques
• precious metals
• works of art
• and valuable collections.

• Real estate: You do not need to transfer real estate held by two people (joint tenancy or tenancy by the entirety) because it automatically transfers to the other person if one owner dies. However, it may still be a good idea to transfer this type of property into a living trust. This is because both owners could pass away in a common disaster, or the surviving owner could forget to place the property into a living trust at a later time. You should read your home deed to determine how the property is owned.
• Small business interests: If you have a small business, sole proprietorship, partnership interests, closely-held corporation or LLC, you should consider placing the interest in the living trust. Please be aware that S corporations have restrictions on ownership by trusts.

What Property does not go into a Living Trust?      

• Property of little value: It may be exempt from probate or subject to a streamlined probate process.
• Personal checking accounts. These are not typically placed into living trusts since money moves in and out of them so frequently.
• Property that you buy or sell frequently: This is especially true if you do not expect to own the property when you die.
• Cars: Most cars are not terribly valuable, and insurance companies may be reluctant to insure a car owned by a trust. If, however, you do own a valuable car, it may make sense to check with your insurance company to see if it will insure cars owned by trusts.
• IRAs, 401(k)s, etc.: Technically, such accounts or funds cannot be owned by a trust. You can still avoid probate on these monies if you directly name a beneficiary to receive the funds in those accounts when you die.
• Life insurance: Your policy will directly designate a beneficiary.
• Income or principal from another trust: If you are receiving interest or principal from another person’s trust, you may not place this property in your living trust to give to beneficiaries. However, you may give this interest and principal to your beneficiaries through your will.

Selling Property in Your Trust