Now that you’re looking towards the future and you’ve decided you’re going to create a trust, you may be wondering which of your assets you should use to fund your trust. After all, you’ve worked hard to have a lot to work with.
Let’s start first with assets that should not be used to fund your living trust, such as:
-Qualified retirement accounts – (like) 401ks, IRAs, 403(b)s, (and) qualified annuities.
-Health saving accounts
-Medical saving accounts
-Uniform Transfers to Minors
-Uniform Gifts to Minors
-(and) Motor vehicles.
And you may be wondering why you shouldn’t put your car or truck, or other mode of travel, into your living trust, and the answer is this: cars, trucks, boats, and airplanes can be transferred into a revocable living trust, but many states impose estate taxes when these properties are retitled into a trust, as the law sees this transfer as a sale, thus the taxes.
Plus, if the vehicle is involved in a crash, the other party may sue the trust if it owns the vehicle.
However, certain motor vehicles may retain their cash value for years, and it would be a benefit to transfer it to your trust.
Just this factor alone illustrates that there are many variables associated with your assets that you may consider putting into your trust and this is where the guidance of an experienced estate planning attorney will be of the best benefit for you and your family.
When you have questions, Doane & Doane will be there for you with the answers. Find them online today at doaneanddoane.com.