How Do You Fund A Florida Revocable Living Trust?

The process of creating a revocable living trust begins with signing a trust instrument, i.e., a document spelling out the terms and conditions of the trust, including who will serve as trustee and who are the trust’s beneficiaries. But this is just the first step. Indeed, the trust instrument is little more than a worthless piece of paper unless and until the trust is actually funded with assets.

So how exactly do you “fund” a trust? In this context, funding a trust generally means transferring title to certain assets. In other words, if you create a revocable living trust as part of your own estate plan, you need to re-title any assets that in your individual name to the trustee of the trust (which in most cases will also be you). This is more than a legal formality. It reflects a change in ownership that will keep those assets out of your probate estate after you die.

Here are some examples of assets that are used to fund a Florida revocable living trust:

Real Estate

For many people, their home is their most important asset. Funding a trust with real estate means filing a new deed. Specifically, you need to file a quit claim deed transferring title to the trustee. This deed must be recorded just the same as if you were selling the property and it typically needs to include a copy of the trust (or at least an abstract, or summary of its key provisions). If your house is subject to a mortgage or a homeowner’s association, you may also need permission from the lender or association, respectively.

Tangible Personal Property

There are many forms of personal property that are also subject to some sort of formal title. For example, if you own a car or boat, there is a title for that vehicle. If you want that vehicle in your trust, you need to file a new title document listing the trustee as owner. As with a house, if the vehicle is subject to a loan you may need to obtain permission from the lender before making the transfer.

But what about personal property that has no formal title? Consider all of the items in your home such as furniture, clothing, or electronics. Generally speaking, you can transfer title to such property simply by signing a document describing such property and stating you are transferring those items to your revocable living trust.

Intangible Personal Property

Much like real estate, you can usually transfer intangible personal property like bank accounts and securities by re-titling the account in the name of the trust. There are other intangible assets, however, where it may make more sense to simply change the designation of a beneficiary to the trust, such as with a life insurance policy or retirement account.

Before creating or funding any trust, it is best to consult with an experienced St. Petersburg asset protection lawyer who can advise you of the potential legal and tax consequences. Contact Legacy Protection Lawyers, LLP, today to schedule a consultation with a member of our estate planning team.