Assets can be any form of cash, physical property or intangible benefits. These include:
• A house
• other real estate
• business interests
• stocks, bonds, and mutual funds
• money-market accounts
• brokerage accounts
• royalty contracts, patents, and copyrights
• jewelry and antiques
• precious metals
• works of art
• valuable collections
For estate-planning purposes, assets fall into two main categories: trust assets and probate assets. Assets held within a trust [link to post on trusts] are referred to as trust assets. Assets that are not within the trust are called probate assets. I’d like to outline the two, and show why creating trust assets is preferable in estate planning.
The advantage of putting assets into a trust include reduced estate taxes and greater control in how your descendants will receive their inheritance. When you put your assets into a trust, you no longer own the assets legally, which become known as trust assets.
You can decide what you’d like to be put into a trust, to become a trust asset, and you do this by having the item or property or deed officially given to the trust, with a title in the form of a deed or other legal documentation. For example, a certificate of title for a car owned by a trust should show John Doe, Trustee, or something similar indicates that it’s the trust that owns the asset, and not John Doe himself. There are various ways to transfer property such as jewelry, art, coins and other collectables, and an estate planning attorney can assist with this.
All assets that are not included in the trust are probate assets. A court proceeding is necessary to determine how these probate assets can be distributed. Thus, it makes sense to consider assigning assets to a trust, to avoid having your heirs go through probate court to receive any legacies you have assigned them.
The actual act of transferring assets to a trust can be a bit complicated and challenging, even for an attorney who has some experience with this process. But it’s worth the time to work with an experienced estate attorney to set up a trust for assets so that your estate can run smoothly.
Get help from someone who is skilled in estate planning and probate. It’s critical that you have legal documentation that the trust owns the assets. Without such documentation, these assets cannot be distributed as part of the trust and, as I mentioned, they’re considered probate assets.
The consequences of a poorly planned estate can affect not only the peace of mind of your survivors, but can be detrimental to the value and distribution of the assets you leave behind.
Find an experienced attorney who is familiar with probate law and asset protection in your state to protect your family and protect your legacy. [link to service line questionnaire]