Transferring Assets into a Living Trust
A living trust is a good way to maintain control over your assets while still alive, but also ensuring that it will be passed down tax-free to your beneficiary. Anyone who places assets into a trust is known as a “grantor.” To get the most out of a living trust, a grantor should place his or her most valuable pieces of property into the trust, as that will help the beneficiary to avoid some large taxes on those pieces of property.
Examples of this kind of property could include stocks, mutual funds, brokerage accounts, patents or copyrights, precious jewelry or antiques, artwork or collections. Real estate can be put into a living trust, and it may be a good to do so even if the property is held in joint tenancy because that ensures the property will pass to the beneficiary of your choice even if both property owners die in the same accident or disaster. Small business interests can also be passed on to a beneficiary through a living trust, but there are restrictions on trust ownership of S-corporations.
Other types of property that have lower value do not need to be included in living trusts, because they are more likely to be exempt from the probate process. There are also other pieces of your estate that likely have built-in succession stipulations, like life insurance policies or retirement accounts.
A living trust also still allows you to sell properties that have already been placed in the trust. The most common way to do that is to sell the property directly from the trust, in which case the seller of the property is technically the trust and not you. Another approach is to transfer property out of the trust and then to sell it as an individual.
For more information and guidance on the benefits of a living trust, consult a knowledgeable Florida trusts attorney with the Charles Law Offices.