A living revocable trust can help protect your assets and your family. But how many assets should you transfer to the trust? And what kinds of assets should you add or not add to it? Here are a few dos and don'ts of asset transfer.
Do Transfer Large Value Assets
Start your trust with the most high-value items you own and want to protect. This generally starts with your primary home, any secondary or investment real estate, vehicles, and valuable collections (like art, antique cars, or vintage comic books). These bring the most bang for your buck, as it were, in terms of time and energy to protect the bulk of your estate.
Don't Transfer Everything
Don't feel that you must try to transfer every small item you own into the trust. This will bog down your trust with unnecessary details, and it will cost you time and money to accomplish. Plus, you probably won't ever be done with the task because so many things come and go from everyday life. Instead, focus on the most important items to protect and don't sweat the small stuff.
Do Transfer Items for Privacy
Value isn't the only reason to transfer an asset. Because the trust means the asset doesn't go through probate — and thus enter into public record — the trust also protects your privacy. Consider things you wish to remain private between you and the relevant heir(s). It could be something other heirs might be upset about, something deeply personal, or something that might cause the heir problems if it were public.
Don't Transfer If Other Methods Work
Save yourself time, money, and work by not transferring assets that can be protected through other means. For example, if you can use a beneficiary designation or 'payable on death' for bank or brokerage accounts, the beneficiary can generally access this money very quickly and easily. Putting it into the trust could be an unnecessary step.
Do Transfer On a Regular Basis
Transferring assets to a trust isn't a one-time task. You should revisit your asset list every year to determine what's changed that might affect the trust. Have you purchased new assets? Have values changed? Have you sold, disposed of, or donated other assets? Keeping up with asset changes is the only way to make sure your trust remains relevant.
Where to Start
Want more tips for managing your asset transfers into and out of your living trust? Start by meeting with a will and trust attorney in your state today. Together, you can craft a plan that will protect your heirs, your privacy, and your finances.