Adding Property to Your Living Trust

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.

Living trust property transfer FAQs

What does it mean to add property to a living trust?

Adding property to a living trust means changing the ownership of your assets from your personal name to the trust's name—a process is called "funding the trust." This does not affect your ability to have control over your assets, the difference is that legally, the trust now owns these items. This is important because it allows your property to avoid going through probate court when you pass away, which can save your family time and money.

How do I transfer my house to a living trust?

You transfer your house to a living trust by creating a new deed that changes the ownership from your name to the trust's name. 

1. Prepare a deed (usually a quitclaim deed or warranty deed) that lists the trust’s full legal name as the new owner. 
2. Get the deed notarized. 
3. File this deed with the county recorder's office where your house is located. There might be a small filing fee, but some states waive fees when you're transferring property to your own trust.

What happens to my bank accounts when I add them to a trust?

Your bank accounts will show the trust as their owner, but you can still use them exactly like before. To transfer bank accounts, you'll need to visit your bank or credit union with a document called a "certification of trust." This paper proves that your trust exists and that you're the trustee who can make decisions. The bank will then change the account name to something like "John Smith, Trustee of the John Smith Revocable Trust." You'll get new checks and debit cards with the trust name, but your account number usually stays the same. The process typically takes a few days to complete.

Can I remove property from my living trust if I change my mind?

Yes, you can remove property from your living trust at any time since it's revocable, which means changeable. Removing property is basically the reverse of adding it, as you just need to change the ownership back to your personal name. After removing any property, you should also update your trust's property list to reflect the changes. You might also need to amend your trust document if the removal affects how you want to distribute your assets to your beneficiaries.

What about personal items like jewelry and collectibles?

Personal items without official titles (like jewelry, art, or collectibles) are transferred to your trust using a document called a "general assignment" or "bill of transfer." You'll create a document that lists all the personal property you want to include, such as "diamond wedding ring" or "baseball card collection." Then you'll sign this document and attach it to your trust papers. Unlike houses or cars, you don't need to file anything with the government or pay fees.

Do I need a lawyer to add property to my living trust?

You don't always need a lawyer to add property to your living trust. Simple transfers like bank accounts or personal property can often be done on your own with the right forms and instructions. However, you should consider hiring a lawyer if you have expensive real estate, own a business, have property in multiple states, or have a blended family with complex beneficiary arrangements. A lawyer can also help if you're unsure about tax consequences or if your state has special rules about trusts. 

What assets should I NOT put in my living trust?

Some assets should not be transferred directly into your living trust because it could cause tax problems or other issues. The main ones to avoid are retirement accounts like 401(k)s and IRAs, as well as life insurance policies where you're the insured person. Instead of transferring these accounts to your trust, you should name your trust as the beneficiary. This way, when you pass away, the money will go to your trust without causing immediate tax consequences.