Properly Funding a Tennessee Revocable Living Trust

Posted by John Crow | Sep 28, 2019 | 0 Comments

Revocable trusts, also known as living trusts, have many advantages: they can help you avoid probate, they save you money, and they keep your assets private. Creating a revocable trust in Tennessee is only half of the process. You must also properly fund the trust if you want it to obtain these benefits the revocable trust affords. In this article, we discuss some of the property you may want to place into the trust and how that is accomplished.

Funding 20a 20revocable 20trust

Your Clarksville Home or Other Real Property in Tennessee

For many people, their home is their largest asset. But you may also own other real estate as well. If so, any of these properties can be added to your trust. As discussed in another article, placing out of state property into a revocable living trust is a great idea. By doing so, you avoid having to open probate in these other states.

To transfer your home or other real property to the trust, one of two methods may be used:

  1. a quitclaim deed; or
  2. a general warranty deed.

These deeds are used in different situations, so you will want to confirm with your attorney which is best under your circumstances. Quitclaim deeds are the most common. They convey the property to the trust without guaranteeing good title to the new owner. By contrast, a warranty deed guarantees good title when the transfer is made. Most of the time, an estate planning lawyer will tell you to convey the property via a quitclaim deed. Why? Because generally there is just not a need to guarantee title on a transfer to a trust you will maintain control over.

Also, once the transfer is made, you will need to check on things like homeowner's insurance and taxes to make sure they are aligned with the new ownership. Additionally, you do not need to refinance these properties upon transfer. The bank or mortgage company will still retain their secured interest.

Cars, Trucks, and Other Automobiles

Cars, trucks, and other automobiles can also be transferred to a revocable living trust in Tennessee. To transfer the automobile, the deed must be signed over to the trust, naming the trustee as the new owner. (Note that not all states allow the transfer of automobiles).

Also, like with transfer of your home to the trust, you will need to make sure the new ownership is provided to your auto insurance company. 

Financial Accounts, Investments, and Stocks

In Tennessee, you can also transfer investment accounts, financial accounts, stocks, and bonds into a revocable living trust. If these assets are owned through a brokerage account, the process is fairly straightforward. Give your financial advisor or broker a call and he can prepare the necessary paperwork to transfer the assets to the revocable living trust. However, if stocks and/or bonds are owned by the individually, the transfer process is more complex. The transfer to the trust will require specific, complicated forms to be completed, These forms can be tedious and time-consuming. For bonds specifically, you will need the FS Form 1851 and for most other financial accounts or stocks, you will need certification via IRS Form 1-9. The latter two forms, however, are not the only forms you will need. Each account, investment, stock, and other similar assets will have its own form.

Other Personal Items

Personal property you own but that does not have a title or ownership document attached to it can be included in a trust. These items can include but are not limited to:

  • furniture
  • jewelry
  • collectibles
  • art
  • heirlooms.

To transfer personal items to a trust, you or your attorney will list them on a property schedule that is referenced by and attached to the trust. However, note that it is more common to keep these assets just in your name and distribute them under your will than place them in a trust. 

The Key Takeaway

Having a revocable living trust as part of your Tennessee estate plan does not do you much good unless you fund the trust. Your estate attorney will discuss with you what should go in a revocable living trust and what should go into a last will and testament. Each estate plan is unique and should be customized to each individual's circumstances, financial situation, and intentions. Contact an experienced Clarksville estate planning attorney today.

About the Author

John Crow

John Crow is the founder of Crow Estate Planning and Probate, PLC, a boutique law firm located in Clarksville, Tennessee. He has extensive experience in guiding people through the important and often complex decisions surrounding wills, trusts, conservatorships, and business formations.

Comments

There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

Your Legacy Matters

Your legacy matters because it is the impact you have on your family and community after you are gone. Your legacy is your story, it is what you leave behind. What do you care about the most? What are you passionate about? At Crow Estate Planning and Probate, our job is to protect what matters to you most. We want to make sure that the success you have had in your own life will be passed down to your children and generations to come.

Call Us Today

If you are looking for an estate attorney, we know the issues you face can be overwhelming and confusing. Our job is to make sense of it all. Please reach out and let us know how we can help you!

Menu