You may set up a trust with high hopes that it will benefit your family, but some trust creators make a crucial mistake. They create a trust but neglect to fund it. As a result, the trust is not able to provide loved ones with an inheritance because the trust contains nothing to transfer to heirs.
According to Kiplinger, you should make sure your trust actually contains the assets that you want it to have. If you want your trust to convey properties or accounts to your children, you may have to take specific actions to transfer ownership of those assets to the trust.
Title your trust as a property owner
You may own a vacation home or a rental property that you want to pass to your children. You should title your real estate in the name of your trust. You may confirm if your trust owns your residence by checking the deed. Keep in mind that if you refinance a property, your bank may require you to take off the trust name for the purposes of financing the home. You might have to title your trust as the property owner again once the refinancing is complete.
Make your trust a beneficiary
If you want your life insurance policy to benefit your children through your trust, check the beneficiary designation. You can name your trust as either a primary or contingent beneficiary. Go over your other accounts to see if naming your trust as a beneficiary fits your priorities, as you may want your insurance or pension to directly pay to your children.
You can also make your trust a beneficiary of your IRA or retirement plans, but be aware of possible tax consequences for doing so. This might still be a beneficial option because diverting retirement money to a trust can prevent creditors from claiming it or protect the money from spendthrift heirs.
List your trust as an account owner
You can also have your trust control money from bank or investment accounts that are not part of retirement or IRA plans. To do so, you must list your trust as the owner of these accounts. You may achieve a switch of owners by contacting your financial institutions. Double check your account statements to verify the change in owners.