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What can I put into a trust?

On Behalf of | Jan 4, 2023 | Uncategorized |

As you consider your overall estate plan, a trust can be a great option for you to ensure that your loved ones are taken care of.

There are various types of trusts that you can set up, with different requirements and terms. However, the idea behind each type of trust is relatively the same: you appoint a trustee who is responsible for distributing the trust assets according to your wishes.

Before you set up a trust, it is important to know what you can put into it. The good news is that there are a wide variety of assets that you can use to fund a trust.

Cash and other accounts

Your trust can include several different types of accounts, including cash accounts, annuities, brokerage and investment accounts.

You cannot put certain types of investment accounts into a trust, such as 401(k) or 402(b) accounts.

Real estate and personal property

Real estate and personal property can be included in a trust. Personal property must be something tangible, meaning in its physical form.

A mortgage on your real estate does not prevent you from putting it into a trust. The mortgage follows the property itself, not the owner.

This means if you leave your home to someone, they will receive the home with the mortgage, but the mortgage company cannot demand they pay the mortgage in full.

Animals are considered personal property under the law, so you can even use a trust to determine who receives your pets after you die.

Additional assets to consider

Other items you can fund your trust with include stocks, bonds, life insurance proceeds and oil, gas and mineral rights. You can even fund a trust with money owed to you through loans you have made to others.

Funding your trust involves transferring any assets, deeds or documents out of your name into the name of the trust. There may be tax consequences for doing this, so it is best to set up and fund your trust with the guidance of an experienced estate planning attorney.