There was a time when trusts were used almost exclusively by wealthy families as a way to pass down the family fortune without paying estate taxes and without losing complete control over how the fortune was spent. In the 21st century, however, trusts are frequently included in even the most basic estate plans. If you are considering the addition of a trust to your estate plan in St. Louis, you may be wondering how to fund your trust. Actually, funding a trust in St. Louis is rather simple.
At its most basic, a trust is a legal arrangement whereby a person or entity holds and manages assets for the benefit of a third party. If you ask your brother to hold onto the family photo album until his son reaches adult hood, you have created a trust wherein you are the maker of trust (also called the trustor or settlor), you brother is the trustee, and his son (your nephew) is the beneficiary. In that trust, the photo album is a trust asset. A trust can be very simple or extremely complex, depending on the purpose of the trust. All trusts, however, must be funded.
Almost any type of asset can be used to fund a trust. Once the trust agreement has been created, a bank account for the trust is also opened in the name of the trust. A trust becomes a separate legal entity once the trust has been created, Cash, if course, can be used to fund a trust by simply depositing the cash into the trust bank account. With few exceptions, almost anything of value can be used to fund a trust and/or can be held by a trust. The precise mechanism used to transfer the assets into the trust, however, will change. Real property, for instance, must be signed over into the trusts name so that the deed reflects the change of ownership. Stocks and bonds are also commonly used to fund a trust as are the proceeds from a life insurance policy. In the case of insurance proceeds, you will need to name the trust itself as the beneficiary of the policy proceeds.
Although almost anything of value can be used to fund your trust in St. Louis it is important that you consult with your estate planning attorney to ensure that the proper steps and procedures are followed to transfer ownership into the trust.
- Staying Current is Especially Important in the Pandemic - October 22, 2020
- Staying Current is Especially Important in the Pandemic - October 1, 2020
- How Will You Age in Place and Be Able to Die at Home? - August 16, 2020