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The best way to think of a trust is to think of it as a box. With a standalone trust, as soon as it’s signed by the creator/client and the Trustee it springs to life, and you have a trust (box) into which you can transfer assets.  The types of assets that should be transferred into a trust (box) depends upon the particular assets the client owns and wants to preserve. Almost any asset can be transferred into a trust. If the client wants to transfer real estate into a trust, this is done by creating a new deed. If the asset to be transferred into the trust is cash or bank accounts , the client works with his bank to create a new account titled in the name of trust and moves funds from his/her personal account into the new trust account.  Transferring brokerage accounts into a trust is essentially the same process as transferring a bank account. To accomplish the transfer of a brokerage account, the client should contact his/her investment advisor and create a new account in the name of the trust and move desires shares/investment into the trust. Note, however, that there are tax consequences to transferring brokerage accounts into a trust, and clients should always work with their attorney, CFP and CPA before making any transfer into a trust.

Unlike standalone trusts, testamentary trusts only spring to life when the Last Will and Testament they are contained in is admitted to probate. For this reason, testamentary trusts are typically only funded with estate assets. Anything that would pass as part of a client’s estate under a client’s Last Will and Testament can go into a testamentary trust. Mechanically, the first step to funding a testamentary trust is having an executor seek the Last Will and Testament’s admission to probate. If probate is granted, the executor then collects estate funds and deposits them into an estate account. If the Will calls for the funding of a testamentary trust, the executor will pass assets to the trustee of the testamentary trust who will then set up a testamentary trust account and deposit asset into the trust.

For more information on Properly Funding A Trust In Estate Planning, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (516) 888-5381 today.

C. Haner Law

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(516) 888-5381

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