Like most people, the cornerstone of your estate plan is likely your Last Will and Testament. Also like many others, however, you probably have chosen to, or are considering the inclusion of, include additional components to your estate plan. While your comprehensive estate plan may include a wide variety of additional components, one common addition to an estate plan in recent decades is a trust agreement. If you are new to the concept of a trust agreement, you may be wondering “What assets can be used to fund a trust?”
Trusts were once used almost exclusively by wealthy families as a mechanism by which they could pass down the family fortune through the generations while simultaneously retaining a certain degree of control over the assets and avoiding significant tax liabilities that are typically incurred when wealth is transferred. Over the past century, however, trusts have evolved to the point where the average estate planner can benefit from the inclusion of at least one trust agreement in his/her estate plan.
Although there are a seemingly endless number of specialized trusts that can be used to achieve every specific estate planning goals, all trusts require the same basic elements for creation. Those elements include a Trustor (the person who creates the trust), a Trustee (the person who administers the trust and manages the trust assets), trust terms that are used to administer the trust, named beneficiaries, and assets to fund the trust.
Fortunately, almost any type of assets can be used to fund your trust, including cash, investment accounts, and securities as well as real property, life insurance policies, and even collections of art, coins, or other collectibles. In essence, just about anything of value can be used to fund your trust agreement. Once an asset has been transferred into a trust, however, it becomes trust property. If you have created an irrevocable trust, that means you will no longer retain any ownership interest in the asset nor will you retain any control over how the asset is managed. If you created a revocable living trust, however, you will retain the ability to transfer the asset back out of the trust should you wish to do so in the future.
Although you may use almost any type of assets to fund your trust, there are often tax, asset protection, and/or practical reasons why you may want to choose specific assets over other assets. For this reason, it is always best to consult with an experienced New York estate planning attorney before making any decisions. Contact the experienced New York estate planning attorneys at The Law Offices of Kobrick & Moccia by calling 800-295-1917 to schedule your appointment.