Wrangling Your Assets: What to Put in a Revocable Living Trust (and What to Leave Out)

In the wild west of estate planning, a revocable living trust can be your trusty steed, guiding you through the rugged terrain of asset management and inheritance. Just as a cowboy knows the lay of the land, it’s essential to understand which assets can go in your trust corral and which ones typically stay out in the open range. So saddle up and let’s ride through the essentials!

(By clicking on the “asset” link it will give you a more in depth explanation as to the pros and cons of funding your Living Trust with that asset.)

Real Estate: Whether you’ve got a sprawling ranch or a cozy homestead, real estate is a prime candidate for your trust. Transferring your property into the trust ensures a smooth transfer of ownership upon your passing, keeping the probate wolves at bay.
Bank Accounts: If you’ve got a revocable trust, you can switch up your beneficiaries as much as you like before you make your final ride. So, keep your wishes clear and your assets secure!
Investments: Stocks, bonds, and mutual funds can also find a home in your living trust. This way, your investments won’t be left to rust in probate purgatory, and your beneficiaries can access them more quickly.
Personal Property: Valuable items, like your gold coins or a collection of prized spurs, along with interests in a business, can be rounded up and added to your living trust using an Assignment.
Retirement Accounts: 401(k)s and IRAs are usually left outside the trust. These accounts have designated beneficiaries, and placing them in a trust can complicate matters, including tax implications. Just like a cowboy knows to avoid unnecessary trouble, it’s wise to keep these accounts separate to ensure a smoother financial ride for your heirs.
Life Insurance Policies: Most folks don’t need to hitch their life insurance to a trust. Similar to retirement accounts, life insurance benefits can be paid directly to named beneficiaries.
Vehicles: For most folks in California who saddle up with a revocable living trust, there’s really no need to toss your trusty steed—or car—into that trust. The DMV has straightforward ways to transfer ownership after you ride off into the sunset, all without the hassle of probate. You can check out their webpage for more details.

The Final Roundup

Navigating the wild frontier of estate planning can be tricky, but understanding what to include in your revocable living trust can steer you clear of potential pitfalls. As you gather your assets, remember the golden rule: keep it simple and clear. Your goal is to make life easier for your loved ones when it’s time to pass the reins.

Call now to get your Living Trust started. It’s easier than you think!

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Reference:

Underwood Law. (n.d.). What is the difference between a grant deed and a quitclaim deed? Retrieved September 2, 2024, from https://www.underwood.law/blog/what-is-the-difference-between-a-grant-deed-and-a-quitclaim-deed/