How to Fund a Revocable Living Trust in Oklahoma
Revocable living trusts are powerful estate planning tools that are becoming more and more popular. They give an individual the flexibility to maintain control over their assets during their lifetime, but can allow those assets to pass to beneficiaries outside of probate. One step that many people miss after creating their trust is actually funding it. If you fail to fund your trust, then you lose all the benefits the trust would have provided.
What Is a Revocable Living Trust?
There are generally two major types of trusts:
- Revocable trusts
- Irrevocable trusts
As the names imply, an irrevocable trust cannot be easily revoked or amended. Once the trust is established and funded, the grantor loses control over the trust assets. Revocable trusts, on the other hand, can be amended or revoked at any time.
A revocable living trust is a trust created during the grantor’s lifetime that they can change or revoke at any time. This allows the grantor to retain control over the trust and its assets while still offering some of the benefits that can be realized by using a trust for estate planning in Oklahoma City.
The Basics of Funding Your Revocable Living Trust in Oklahoma
Funding a trust is not an extremely difficult process, but it is something that many people overlook when establishing their trust. Working with an experienced trust administration lawyer can help ensure all title transfers are executed properly. The process of funding the trust simply means transferring ownership of assets from your personal ownership to trust ownership. This may include retitling bank accounts or vehicles, using an assignment of ownership form for personal property, or executing a new deed for real property.
One important thing to remember is that assets you acquire in the future are not automatically placed into your trust. For instance, suppose you purchase a home or business a few years after you created your trust. You still need to transfer ownership of any future acquired assets into your trust.
What Types of Assets Are Placed in a Revocable Living Trust?
There are many types of assets that may be placed into your revocable living trust. Some of the most common assets placed into a trust are:
- Real Estate
- Bank accounts
- Business interests
- Automobiles and other personal property
- Brokerage accounts
- Life insurance (by designating the trust as the beneficiary)
Retirement accounts, such as an IRA or 401k, are typically not transferred to the trust. Doing so would create a taxable distribution, and this could cost you a lot of money. Instead, name the trust as the beneficiary of these accounts. Upon your death, the proceeds from the account would be placed into your trust, and this means that they would then be managed according to your trust documents.
What Happens to Assets Not Placed In My Trust?
If you leave assets out of your trust, those assets would pass according to the terms of your will. If you die without a will, then any assets not in your trust would transfer according to the intestate succession laws in Oklahoma, which an Oklahoma City probate attorney can assist with. This is why it is generally considered best to have both a trust and a will working together to ensure that all aspects of your estate are accounted for.
