If you’ve read some of my articles, you have found that for most of you the best way to plan is to use trust-based planning. A will is vital to express your needs, but if that is all the planning you do, your family will have to go to court to distribute your belonging to your loved ones. That can be expensive, your information is public for all to see, and is often very time-consuming. A trust, on the other hand, allows for your belongings to be immediately and privately distributed by the trustee you choose according to the terms of the trust.
Once you decide to do trust-based planning, one of the questions I often hear is, “Can my property also be in the trust or only my money?” The answer is yes, your real property can absolutely be placed in a trust. You can feasibly put any type of property in a trust. To give you a better idea, consider the following examples of the more common types of property that are put in trusts.
It is uncommon for people to put their car in a trust, especially due to concerns that are sure to arise with the insurance company that is insuring the car and its use. However, for those people who have show cars or late-model cars that are collectibles and could be considered an investment, you might want to include those.
The most common property that people put in a trust is real estate. Often, real estate – particularly the family home – is a large or majority percentage of someone’s estate. Additionally, investment properties and other “homes” can also be included. This affords special protection and easy distribution when the time comes.
Interests in Privately Held Businesses
An assessment of the assets held, and the legal structure of the business, needs to be made to determine if this interest can properly be put in a trust. If it is possible to make sure that the business has a smooth transition after the passing of a principle, avoiding the prospect of going to court can be crucial. You should discuss this with your estate-planning attorney to see if this would work for you.
Trusts can be very important planning tools for your life-insurance policies. There are different types of trusts used for insurance policies, depending on whether it’s for estate tax minimization or to ensure the proceeds of the policies reach your intended beneficiaries.
Investment accounts and bank accounts that are owned by one person need to be put in the trust. Again, this would allow easy access to the account without the courts getting involved. In the case of accounts that are jointly owned, some people believe there is no need to put those accounts in a trust because, after you pass, the account passes directly to the joint owner. However, this can be risky because both joint account holders can pass away and then the family ends up in probate.
If you have an interest in a business you should discuss whether this should be included in your living trust with an experienced counseling-based trust lawyer.