Creating a trust is a powerful estate planning decision, but there are many questions you might ask that only have vague answers. For example, you might understandably wonder if there is a limit to the number of assets you can place into it.
The simple answer is that there is no specific legal limit to the number of assets that can go into a trust. However, the decision about what and how much to include requires careful consideration.
Consider the purpose of the trust
Trusts serve various functions, such as a revocable living trust that helps protect assets from creditors. Identifying the goal of the trust helps determine the type and amount of assets to place in it. For example, a trust designed to provide income for children may include assets like real estate, investments or savings accounts that generate income over time.
Evaluate the type of assets
Not all assets are ideal for every type of trust. Some assets, such as real estate, bank accounts and investments, are commonly placed in trusts because they are easy to manage and transfer. However, it may not be reasonable to include personal items like vehicles or collectibles unless they hold significant value.
Consider the complexity of management
The more assets placed in a trust, the more complex the management becomes. Multiple properties, diverse investment portfolios or business interests may require extensive oversight. Trustees should be capable of managing these assets effectively. Placing too many assets in a trust without considering the trustee’s ability to manage them may lead to complications or even disputes among beneficiaries.
Adding a trust to your estate plan will grant you a great deal of control. You can add a wide variety of assets in almost any quantity. However, there comes a point when a trust becomes difficult or unreasonable to manage based on its intended purpose and the amount of assets in contains.