A living trust only becomes legally valid when the assets are placed inside a living trust. This is a common error made by many people new to the estate planning process who might create a living trust but then forget to transfer assets inside, meaning that the assets do not receive the protection or ownership of the trust. There are two primary ways that you can put assets inside a living trust; the first is by changing the title. 

When a grantor holds title on assets such as bank accounts, brokerage or investment accounts and real estate, these can be moved into the trust legally by updating the name of the owner from the individual to the trustee. The second option for funding a trust is assigning ownership rights. This is applicable when the trust grantor owns but does not have the legal title for assets like jewelry, art, promissory notes or some business interests.

Instead, ownership rights must be assigned from the individual to the trustee. Furthermore, the creator of the trust could choose to list the trust as a beneficiary for other assets in his or her estate plan, like retirement accounts, pension, or life insurance. However, it’s important to realize that designating this move does not formally move those assets into the trust.

Not all assets should or even can be placed inside a living trust and consideration of what applies in your unique case should be discussed directly with a lawyer who is very familiar with funding trusts.

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