One of the biggest mistakes people make when creating their wills is thinking that their property will transfer quickly to their beneficiaries. The bottom line is that whether or not you have a will, your assets will go through probate when you pass away. A revocable living trust is a beneficial tool that allows your assets to transition to your beneficiaries. When you have this type of trust in place, you can reduce some of the hassles that come with probate. If you live in Oklahoma, here are some essential factors to consider when it comes to trusts.
Benefits of revocable living trusts
Probate can be expensive and time-consuming for your beneficiaries. The process can last a few months or even a few years. Make sure your property is transferred at the lowest cost to secure your estate plan. This is one reason that trusts are important.
Revocable living trusts are created to protect your assets while you’re alive. The trust will also provide a way to transfer your assets to your beneficiary when you pass away. One of the main advantages of having a removable living trust is to avoid probate.
When you place your assets in your trust, you can assign beneficiaries to the trust and decide the conditions of the trust without having to go through a lengthy legal process. A trust will also give you more privacy concerning your estate and protect your assets if you become incapacitated.
However, you should know that you won’t be able to avoid probate completely. Some assets will still need to go through probate, so proper funding of your trust is crucial. You’ll want to learn all you can about trusts before setting one up.
Common Assets That Should Be Placed Into Your Trust
Creating a trust is one thing, but actually transferring assets into the trust is another matter. If you create the trust and never fund it with assets, then the trust is rendered virtually useless. There are many types of property that can be added to a revocable trust in Oklahoma. Here are some common assets that you might need to consider including in your trust.
Real Property
Your home is often one of the most important assets that may be placed into your trust. You can also place other real property into the trust, such as:
- Rental property
- Land
- Investment property
When you hold real estate in your individual name, it almost always has to go through the probate process after your death. This can be complex and time-consuming. Putting property into a trust can allow it to pass to your beneficiaries without going through probate.
Business Interests
Business succession planning is a crucial part of estate planning for any business owner. If you have an ownership interest in a business, you may be able to place that into a trust. This includes ownership interests in a(n):
- LLC
- Partnership
- Corporation
However, before you do so, you should always consult with an experienced lawyer. The formation document of your business may determine whether or not you can transfer your ownership interest into your trust.
Non-Retirement Bank Accounts & Investment Accounts
Putting these financial accounts into the name of your trust allows your trustee easy access to the funds when needed. It also allows these assets to be transferred to your heirs without going through the probate process. Keep in mind that some financial accounts may have a named beneficiary. In that case, you can simply name a beneficiary for the account. That person will automatically get control of the account after your death without going through the probate process.
Life Insurance
It can sometimes be a good strategy to name your trust as the beneficiary of a life insurance policy. This allows the proceeds of your policy to be placed into the trust upon your death. Some common scenarios in which this may be a good solution are when:
- You have minor children
- You have a blended family situation
- You want to maintain more control over how the proceeds will be used
This is a decision that must be weighed carefully against your personal situation and goals. You should not just automatically name your trust as a life insurance beneficiary.
Getting Help With Placing Assets Into Your Trust
Creating a trust and putting assets into that trust can be a big decision. Those decisions can also have substantial legal and tax implications. You should always seek help from an experienced estate planning attorney who can walk you through your legal options and help you decide on the right approach to meet your goals. The team at Helton Law Firm can help you put together a plan to care for your family and protect your legacy. Contact us today to schedule an initial consultation and get started.