Hello, my name is Maggie LaBranch- Gonzalez and I'm an attorney with Litherland, Kennedy and Associates,
an estate planning and elder care law firm located in sunny Campbell, California.
Today I want to talk to you about the importance of funding your trust. Whether or not your loved ones avoid the nightmare of probate
really depends on your continued
diligence in making sure that all of the
assets that you own now and acquire in
the future are transferred and titled in
the name of the trust . So, what is funding?
Funding is the process in which you
retitle your assets in the name of the
trust.  These can be your community
property assets, or your separate
property assets. In California, the limit
of assets you can hold outside of the
trust is $166,250
assets that have a joint owner or
a designated beneficiary do not count
towards that limit. So what kind of
assets should you be titling in the name
of the trust?  Well, real property. This is
real property that you own either by
yourself or with others, maybe you own a
piece of property with your sister - you
can transfer your interest in your trust.
Bank accounts, brokerage accounts, stocks, those sorts of assets should be titled
in the name of the trust. There is a
major exception. The major exception is
all of your retirement plans.  So, 401ks IRAs, those sorts of assets,
should not be titled in the name of the
trust.  Why?  The IRS considers that an
immediate taxable event. It's as if you
have just cashed it out and now you have
to pay taxes. We don't want to do that. So,
in this case, you would update your
beneficiary forms. Now, there are a couple
of misconceptions I hear frequently
about funding your trust.  First, simply
having a trust is not funding your trust.
That's right! You are going to need to do additional work in
order to fund your trust after you've
created your trust. Two, simply listing all
of your assets on your schedule A, B or C
is not funding your trust. That's just a
list of all of the assets you own at
that time.  It is important you keep that
up to date. Why?  Your trustees need to
know where all of your assets are.  If
you have an updated Schedule A, B or C,
if something is not titled in the trust,
falls out of trust, doesn't have a joint
owner or there is no beneficiary
designated, your trustees can get to
court and have it put in the trust. Three,
that's where your pour-over will comes
into play. A lot of times people say, "yeah,
but I have this pour-over will." The pour-over will is simply a safety net.  We
don't want to have to use it unless we
absolutely have to because it still
involves going to court. It is a probate
process, albeit maybe not the full-blown
process. So, the bottom line is you more
than anyone else determine the
effectiveness of your trust by making
sure it's properly funded. if you found
this video helpful, please hit like and
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