Blog

Home » Blog

How to Put Property into a Trust

in Articles by Greg McIntyre Comments are off

So, you went to your lawyer and had her draft you a shiny new trust. What now? Now you need to put your assets into the trust. This is also known as funding the trust. So, how do you do that? Well, the answer, similar to any other answer you’ll get from a lawyer, is: it depends.

The manner in which you out a particular asset into a trust depends on the nature of that asset. Below are some of the more common assets along with a description of how they are placed in trust.

Real Property

Every piece of real property has some sort of deed associated with it. The type of deed depends upon how the property is owned. Most people own property outright. In that case, you would simply convey the property to the trust by executing a deed from you to the trust (in the name of the trust). If you do not own the property outright, you may deed whatever interest you hold to the trust; however, if you want to place all ownership interest in trust, you will need the signature of the other owners.

To convey the property to the trust, you can use a simple quitclaim deed. A general warranty deed is a deed that conveys property with a promise that there are no blemishes on the title of the property. These deeds are typically used in the sale of real property. Conversely, a quitclaim deed is a deed that conveys property with no guarantee as to the state of the property’s title. Since you already own the property and are using it to fund a trust, whether revocable or irrevocable, it is not necessary to use a general warranty deed.

One consideration that must be made when conveying property to a trust is whether it is encumbered by a mortgage. Most mortgages have a “due on sale” clause. This is a provision whereby if the property is transferred, the full amount of the loan will become immediately due and payable. However, not all transfers trigger the due on sale clause. One such transfer is a conveyance to a trust where the borrower is and remains a beneficiary. It is important to note that the borrower does not need to be the only beneficiary.

Investments

If you have stocks and bonds, then you have a transfer agent. This is the person who keeps track of the securities that you own. You need to request the permission of the transfer agent to transfer your securities into a trust. This can be done by filling out a securities assignment form. Note that if the securities are publicly traded, the stockholder’s signature will need to be guaranteed by a commercial bank—similar to a notarization.

Tangible Personal Property

Tangible personal property is personal property of a physical nature. E.g. vehicles, art, jewelry etc.

Pieces of personal property such as art and jewelry can be easily put into trust. You simply must draft an “assignment of personal property” document to the trust. Such document must name the trust and must specifically describe the item you wish to transfer. It must also be notarized.

Anything that has a title associated with it can also be easily transferred into the trust. For example, cars, tractors, RVs, and mobile homes (that have not been transferred to real property) all have titles. To put these items in trust you simple re-titled the property in the name of the trust.

Conclusions

There are very few things that cannot be put into trust. If you have questions about trust funding, the attorney at McIntyre Elder Law are happy to assist you.

Book Your Appointment Today!

Regards,

Brenton S. Begley

Elder Law Attorney

McIntyre Elder Law

“We help seniors maintain their lifestyle and preserve their legacies.”

www.mcelderlaw.com

Phone: 704-259-7040

Fax: 866-908-1278

PO Box 165

Shelby, NC 28151-0165

The Most Important Part of Estate Planning No One Talks About

in Articles by Greg McIntyre Comments are off

Most Estate Planning attorneys will tell you that planning ahead is the most important thing you can do to ensure you and your family are protected. I agree, but what does it mean to plan ahead? The most obvious answer is: planning ahead means anticipating future contingencies and having your affairs in place to navigate them accordingly. But what is implicit in this answer, and what people tend to overlook, is that planning ahead requires communication.

I cannot stress enough the importance of talking through these issues. This is especially true when your estate plan depends on others for your protection. Much of estate planning involves appointing another as a fiduciary to safeguard your assets and wellbeing. Effective and deliberate communication between principle and fiduciary is paramount to the efficacy of the plan.

Let’s say, for example, that you become incompetent and are solely reliant on your attorney in fact to make legal and financial decisions. If you never talk to them about your wishes, goals, or plans, how will they know how to act on your behalf? Without clear direction, the fiduciary’s actions may be open to ridicule from family members or others, which can make them unable to act when necessary.

Just as concerning, is the possibility for abuse of power. I would like to think that people won’t go out and get general estate planning documents that aren’t tailored to them specifically. However, this is not the case. There are many ways to acquire a quick and dirty estate plan. As you’d imagine, these documents tend to not be specific. And while there is no substitute for a solid and personalized estate plan, much of the ambiguity associated with general planning can be mitigated through clear communication. Although, that still does not ensure that your attorney in fact, trustee, or executor (fiduciary) will actually carryout your wishes.

What’s the solution?

Communication means two things: 1) clarity and specificity in the documents themselves; and 2) discussion of your intentions. Thus, the solution is to create a personalized estate plan with very specific terms. Thereafter, explain to the fiduciary the motivation and goals (your intent) involved in creating your plan. Explaining your intent gives the fiduciary a clear idea of what their role is. Including specific terms gives the fiduciary a framework in which to operate to fulfill your goals. The idea is, you want to have a hand on the wheel no matter what happens to you.

Do not fall for the false security of a generalized (quick and dirty) estate plan. Make sure that you speak with your attorney and understand the ins and outs of the plan you’re creating. Also make sure that you explain that plan to the people you trust to carry it out.

If you have any questions about your estate plan, don’t hesitate to give McIntyre Elder Law a call at 704-259-7040. 

Regards,

Brenton S. Begley

Elder Law Attorney

How do You Preserve Your Mental Health and Dignity as You Age?

in Articles by Greg McIntyre Comments are off