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Many people seem to be under the false impression that once a living trust is created, they’re all done. Instead, creating a living trust is simply where you start when it comes to protecting your assets and family fwhat do I do with my living trustrom probate.

Once your attorney has created your living trust, you have reviewed it and are certain that it reflects your wishes, you must fund it for it to have any value.

There are two ways to fund your living trust:

  • during your lifetime
  • after your demise

Assets are only protected by the living trust if they have been transferred into the trust. The best time to do this is during your lifetime, as it avoids probate completely.

Transferring assets into the name of the trust during the initial trustee’s (you) lifetime is the most common way to fund a revocable living trust. The transfer usually takes place right after the creation of the trust. Even though your assets are owned by the living trust, you still retain all rights to fully manage them from within the living trust even after it has been funded.

The benefit of funding your trust during your lifetime is that you completely avoid probate, except for any property you might not have yet transferred to the trust.

The following are typically transferred to your trust:

  • your home – transferred to the trust via a quit claim deed filed with the recorder’s office in the county where the real property is located
  • any other house(s) you own,
  • bank accounts – transferred to your living trust by the bank once you present them with an Abstract of the trust (summary)wel.
  • You simply name any other assets you wish to place in your trust into the Schedule A, which is essentially a section of your living trust where you list all assets and their location to make it easier for your Successor Trustee to find. Items that are good to include are:
  • art collection(s),
  • jewelry,
  • collectible vehicles
  • stocks and bonds
  • anything else of value

Note that some assets do not need to be transferred to your living trust because the beneficiaries will get their bequests directly from trust-like instruments without probate, e.g, life insurance, IRAs, 401(k)s, annuities, pensions and transfer on death accounts.

Your second option is to create the trust but not fund it, meaning, not transfer anything into it during your lifetime. After your demise, provided you have a pour-over will in place willing all of your assets to your living trust, it will expedite the probate process, making it much faster and less complicated. In such a case, the probate court simply has to approve the transfer of all assets to your living trust.

It is only if your living trust is funded before your demise that you completely avoid probate.

As you can imagine, it is wise to have a pour-over will even when you have a living trust. Typically, even if your living trust is funded during your lifetime, the pour-over will serves to bequeath to the trust any and all property that you have not yet transferred to it. This greatly shortens the probate process for anything left out of your living trust.