Should You Fund Your Trust Or Make It a Beneficiary?

If you have a Revocable Living Trust you can either fund your estate assets into the Trust or name the Trust as a beneficiary. Which way you choose will depend upon the asset.

Life Insurance Policy You can fund your life insurance policy into your trust, but when do so you must use caution. Some state laws may not protect a Revocable Living Trust from creditors. In this case your life insurance money may be used to pay debts.

Funding your policy into your Trust can, however, allow your trustee quick access to funds before and after your death. If you should become mentally or physically incapacitated, your trustee may be able to borrow against the policy if it is funded into your account. These funds can be used to care for your medical and personal well-being.

Financial Holdings Most accounts that are not retirement accounts set up through your employment can be easily funded into your Trust. These accounts include your savings accounts, checking accounts, non-retirement investments, and money market accounts. You can also fund a mature certificate of deposit into your account. If you prefer, you may instead name a pay on death beneficiary for many of these accounts. You must, however, stay on top of updating all beneficiaries as needed.

If, however, an account has tax deferment status as many retirement accounts do, you may want to name your Trust as a beneficiary instead of funding it into the Living Trust. When you fund a tax deferred account such as a 401K, the income taxes will become immediately due.

Personal Items Most personal items such as housewares, jewelry and clothing can be funded into your Trust. You may also fund vehicles, but there is a chance you may have to pay taxes when the Title is transferred from you to your Trust. You also run the risk of creating a liability for the trust if the vehicle is involved in an accident.

Real Estate A Living Trust is one of the best places to title your real estate because it can help your land holdings pass easily from you to your heirs upon your death. Using a Trust to bequeath land is a great way to help your property avoid probate.

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How to Decide If You Should Make a Will

If you're over 18, you are legally entitled to make a last will and testament. Here are 10 reasons why it's a good idea to do so.

1. Are you in a long-term relationship but are not married? If so, your partner could end up penniless without a will in place.

2. Is there likely to be any disputes over your possessions in the event of your death? By not having a will, your family may be left waiting for your estate to be settled.

3. Do you like the idea of leaving some of your money to charity? Just because you do not have family, does not mean you should not make a will. You can still stipulate who benefits.

4. Do you want to avoid your estate going to the government? That's where your assets will end up without having a will.

5. Have you recently got married or had a new baby? If so, these changes could warrant a change to your existing will or the creation of a new one.

6. Have you bought new property? If so, then you need to make a will to ensure your family don't miss out on their share after you're gone.

7. Have you recently been divorced? Your ex-spouse may still get part of your assets, even if they are now living with someone else.

8. Do you want peace of mind from knowing your family won't have to pay expensive inheritance tax? A will can ensure your spouse or civil partner are considered as exempt beneficiaries.

9. Is your current will still enforceable? If you've got married since writing your will, it become null and void (the will, not the marriage).

10. Do you have children? If so, a will can help set up a trust fund for them in the event of your death and even stipulate who would raise them if you and your partner were to die.

To create your will, you are going to need a family solicitor. There are many friendly and experienced wills and probate solicitors that can help you sort everything out.

Why a Living Trust Is Usually Made   What Is The Role Of A Probate Solicitor?   New Year's Resolution: Make or Revise Your Will   How Inheritance Claims Can Prove Very Difficult   An Intro Into Properties Planning   10 Top Terms Used In Wills and Will Writing