Unlocking the Potential of Your Trust: What You Can Include

Embarking on your Estate Planning journey is an exciting - yet - potentially overwhelming task. Stay calm and collected throughout the process by keeping yourself organized. Before taking the first steps in creating your trust, you will want to make sure you have a strong understanding of what a trust is, what the benefits are,  and which type of trust is right for you. 

What is a trust?

A trust is a legal document that designates a trustee who holds assets on behalf of your designated beneficiaries. In simpler terms, a trust is an arrangement where someone you trust (the trustee) takes care of your assets and ensures they go to the people you want (the beneficiaries) after you're no longer here to manage them yourself.

What are the benefits of a trust? 

Selecting a trust as your Estate Planning document of choice can be a great decision since a trust, as opposed to a will, allows you to avoid probate while legally transferring your assets and property to your beneficiaries of choice. Trusts allow for flexibility when it comes to managing complex family dynamics such as blended families, divorce, multiple beneficiaries, and more. 

Some Key Benefits:

• Avoid Probate 

• Tax advantages - minimizing state and federal taxes

• Asset protection from creditors 

• Highly customizable and high control over assets

Types of trusts overview

There are two main types of trusts: revocable or living trusts and irrevocable trusts. A Revocable Trust can be changed and updated at any time, providing you with flexibility as your financial, real estate, and familial situations evolve. An Irrevocable Trust operates as a more final document. With an irrevocable trust, it's like putting your assets into a "safe box" that's separate from your taxable estate. Once they're in there, they generally can't be taken back, which can help reduce taxes and protect those assets for your intended beneficiaries. Once completed, this type of trust cannot be changed by the executor or disputed by beneficiaries.

Learn more about types of trusts and benefits in our, "Types of Trusts: Choosing the Right One" article.

What can be added to a trust?

As we discuss what assets and property you can put in your trust, let’s first take a look at the things you should avoid putting in your trust. While trusts allow for great flexibility, there are a few assets that experts advise against putting in your trust for reasons such as probate, legal enforceability, and more.

Avoid including the following:

• Vehicles - cars, boats, trucks, motorcycles, etc.

• Retirement assets 

• Health Savings Accounts 

• Assets in other countries 

• Physical cash - you need to place the money you want transferred into a bank account 

What can be put inside your trust 

Now that we’ve covered what shouldn't be transferred through a trust, let’s look into all the options trusts allow for asset and property transfers. 

Real Estate Property 

All real estate property such as homes and land can be placed inside your trust. Property owned across state lines can all benefit from trust policies such as bypassing ancillary probate (secondary probate for property owned in various states). Various documents to properly transfer your real estate property may be required, we recommend you reach out to the necessary professionals to make the transfer as seamless as possible. 

Financial assets 

Tangible financial assets such as bank accounts and cryptocurrency can be transferred via a trust. 

Bank Accounts 

In general, nearly all types of bank accounts, from checking to savings, and safe deposit boxes to mutual fund accounts, can be placed in a trust. This transfer provides you with a high level of control over how your beneficiaries are to receive the assets you leave for them. It is recommended you contact the financial institutions you bank with to understand their specific guidelines. 

Cryptocurrency

It is important to note that cryptocurrency is still relatively new and estate planning tools and policies are still making sense of it. The best way to ensure your cryptocurrencies are properly distributed to your heirs is to place them in a trust so they may get all the benefits of trusts. 

Investment assets

Investment assets such as stocks and bonds can be placed into a trust. It is recommended that you seek expert assistance from a financial advisor or estate planning attorney to properly understand how to transfer the ownership of your investment assets.

Company stocks and shares 

You may be able to transfer any shares, stocks, and voting power you may have in LLCs. 

Personal Property 

Personal property such as family heirlooms can be added and transferred through a trust. You can clearly outline and detail which of your personal property items you wish to leave with which heir or beneficiary. We can imagine you have a lot of things, make sure to be as thorough as possible here.

Life Insurance Policy 

Your life insurance is arguably one of the most important parts of your estate plan. It ensures your loved ones will be taken care of when you are no longer here to do so yourself. There are a few ways to ensure proper transfer and protection of your life insurance policy to your trust. In order to enable a seamless transfer, we recommend connecting with your insurance provider. 

How to keep track of everything?

At GoodTrust, we're dedicated to making things as easy as possible for you which is why we offer you some tools to help keep track of things after you complete the initial step of your trust journey. Once you finish completing your trust using our intuitive document creation tool, you'll be directed to download your estate plan. Within your estate plan you will find the following helpful tools:

1. Instructions to your trust - think of this as your checklist to guide you through the important steps from signing to funding.

2. Digital Vault Instructions - this page will show you how to easily upload your completed trust to our Digital Vault. This ensures your important documents stay protected and offers the flexibility to share them with your loved ones, so they know where to locate them when necessary. Get started with our Digital Vault, here, and find out just how much you can safely store.

3. Schedule A Form - this form allows you to clearly state which assets you've transferred into your trust. You'll be able to detail the name, description, value, and beneficiary of each property item to make sure you and your loved ones know exactly what's in your trust.

4. Funding Guide - once you've created your trust, you need to fund it, which means transferring your property and assets into the trust's name. This may sound complicated, but this step-by-step guide will ensure you know exactly how to transfer your various property and assets, from family heirlooms to real estate, into your trust.

5. We also throw in a few additional helpful tips so you can feel comfortable knowing you're taking the right steps in securing your legacy.

We understand choosing a trust is a big decision especially as it allows you to do so much. With any estate planning decision, we recommend that you consult your loved ones, ask them questions, and work through your decision making process with them to ensure you are confident with your choices. Learn more about trusts, here.

Get started with GoodTrust today, here, and take the first steps in your estate planning journey.