Find a qualified attorney to do steps two through five.
This is a complicated process. The wrong steps could result in unintended outcomes from a tax and distribution perspective.
Make sure that the title on all legal assets are transferred into the trust name.
For a trust to work, assets must be transferred from a person's name to the name of the trust. Assets in a person's name, which don't have beneficiary designations, will go through the probate system. Probate is the court process of transferring assets in a person's name to the names of the people designated in their estate plan. If there isn't an estate plan, the assets will pass according to the laws of the state where the individual legally resided at the time of death.
Either make sure the attorney transfers the documents to the trust name or make sure the trustor transfers each asset appropriately.
When creating a trust, assets must be titled in the trust name. Some attorneys do this as part of the fee and most don't. Often clients are provided with a trust funding letter, advising them to transfer the assets. Each asset requires different paperwork. Contact each institution which holds an asset and request the proper transfer documents. Fill the documents out and send them back. Be sure to enclose an instruction letter, a certificate of trust, a W-9 and the documents they sent you. Real estate is handled much differently and a new deed will be required. Attorney assistance is highly recommended for.deeds.
IRAs, 401ks, annuities and some life insurance policies should not be transferred into the trust name.
Certain retirement assets and life insurance policies must retain the original owner of the asset. Quite often, if married, for tax reasons, the spouse should be the primary beneficiary. The trust may often be named as the contingent beneficiary. However, the trust must be qualified or the assets will be taxed much sooner. If not married, the trust may be the primary beneficiary, but again, make sure that you are working with a qualified trust or the trust will be subject to adverse tax consequences.
If married, make sure the assets are designated to the proper trust or proper trust share.
Depending on the size of the estate and the type of trust you are working with, it is very important to designate the assets to the right trust share or correct trust. Be very careful. The wrong step could cause unintended results.
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