Frequently Asked Questions About Funded Living Trusts
Can I act as my own trustee?
Yes. If you are competent to handle your financial affairs now, there is no legal reason you cannot be the trustee of your own living trust. Most living trusts have the people who created them acting as their own trustees. If you are married, you and your spouse can act as co-trustees.
What can I do with my assets once they are in my Living Trust?
If you are the trustee, you can manage the assets the same way you could manage them if they were not in your trust. When you set up your living trust, you are transferring the title of all your assets from you as an individual to yourself as the trustee of your trust. You then must manage the property for the benefit of yourself as the beneficiary. This means that you will have absolute and complete control over all the assets of your trust. You can spend, save, invest or even give the assets away at your discretion. If you change your mind about the trust, you can amend it or revoke it without penalty.
Will my Living Trust avoid income tax?
No. Creating your Revocable Living Trust allows you to manage your assets the way you want them managed. After your death, your trust describes the people you want to manage your assets and how they should be managed and distributed. During your lifetime, your trust uses your tax identification number. It is not a vehicle for reducing income taxes. If you are the trustee of your living trust, you will file your income tax returns in the same way you filed them before the trust existed. There are no new returns to file and no new liabilities are created.
If I transfer real estate into my Living Trust, will my property taxes go up?
No. Transfers into your living trust do not affect your property taxes. If you own property in a jurisdiction outside of your residence state, you should transfer that property into the Living Trust also. That way you avoid probate in the jurisdiction outside of your residence state just to transfer that property at the time of your death.
If I am only a part owner of property, can I transfer my share into a Living Trust?
Yes. Your share can go into the trust without changing the interests owned by others.
Can I name Trustees and Beneficiaries who live out of state?
Yes. There is no limitation on where your trustees or beneficiaries must reside.
Will I have to consult an attorney every time I buy new assets?
No. Once your current assets are transferred to your living trust, then you should take title to all new assets in the name of the trust. If you do, the assets will be owned by your trust. In our office, we prepare estate plans for our clients on a flat fee basis. You will know your fees up front before you authorize the work. The fees include follow up such as phone calls, emails, even subsequent meetings to discuss issues like whether a new asset should be titled in the name of the trust. We do not charge separately for these types of follow up conversations.
Should my Living Trust be registered or recorded anywhere?
No. Your living trust is a private document, which is not recorded. However, if you own any interest in real estate, the new deeds showing trust ownership will be recorded. You also may need to record an affidavit or certificate of your trust with the county recorder’s office.
What does “Funding” my Living Trust mean?
“Funding” is the term that describes transferring the assets in your name individually or your name with other people into your trust. Your funding changes ownership of your assets into the name of your living trust. Once this process is completed, then your living trust is a funded living trust. Only a funded living trust will avoid living probate, death probate and assure that your wishes expressed in your trust are accomplished.
Can I sell assets owned by my Living Trust without complications?
Yes. You can sell assets as you do. You will, however, add the word “Trustee” after your signature.
Can I change the terms of my Living Trust?
Yes. While you are alive and competent, you can alter your living trust or even revoke it without penalty.
Can I transfer real estate into my Living Trust?
Yes. all real estate should be transferred into your living trust. Otherwise, upon your death, depending upon how you hold title, there will be a death probate in every state where you own real property. When your property is owned by your living trust, there is no probate.
Can I transfer my separate property and my jointly owned property into my Living Trust?
Yes. All of your assets, both separate and joint, are transferred into your living trust but they are not commingled. Separate property assets may retain their separate property character while in your trust.
What if I move to another state, is my Living Trust still valid?
Yes. Your living trust is valid in all 50 states, regardless of the state where it was originally created.
Is a Living Trust only for the rich?
No. A living trust can help anyone who wants to efficiently and privately manage and distribute property to family, friends, charity and others.
Is a Living Trust a good idea for a single person?
Yes. If you are widowed, divorced, or unmarried, a living trust offers protection for your estate. It will eliminate a living probate and a death probate.
Are there any major disadvantages to a Living Trust?
No. Because you have complete control of all assets in your trust, you may manage your living trust in any way you want. Also, because your living trust is revocable, you may make any changes while you are alive and competent. Creating the living trust and transferring your assets into it requires an investment of your time and money. The fee for preparing a living trust based plan is greater than that for a will based plan. You should compare that additional cost with the benefit of avoiding the cost of one or more probate estates.
Call 614.336.3083 or email Barb Case at email@example.com to schedule your no obligation, no cost meeting today.