Depending on the type of trust that you have and the assets that you own, it may or may not need maintenance. For our clients, we usually check up on them once a year. If people require anything new, let’s say you’ve bought a new car or if you’ve invested in new stock, chances are it isn’t in the trust and it needs to be put in the trust. If you purchase property, most of the time it is not put into the trust’s name, it’s put into your name. So it needs to be transferred after you’ve purchased it. That’s something you need to be vigilant about as you move along in life which is, “Should I be owning this or should my trust own it?” Most of the time, if it’s something that you are going to keep for a while, let’s say 3 years or longer, you should put it into your trust to be safe.
The process is not very complicated for most things. If you simply contact your attorney, your attorney will tell you that it’s just a form that needs to be filled out and most of the time the attorneys have the form or can get them very easily. They’ll say, “Here’s the form, fill it out and send it in or you can have a meeting with the attorney.” If it is a complicated transfer, they’ll tell you that it is something that they ought to do. “Come on in, we’ll prepare the documents and bring in the statement or bring in that information so it can be done properly.” If it’s not transferred or not transferred properly, it’s technically not owned by the trust, and then you’ll have to go to court later.
Are There Any Assets That Cannot Be Funded Into A Trust?
You can put anything you want into a trust as long as it is an asset. Gold, silver, jewelry, any personal property can be put into a trust. Things with titles such as cars, motorcycles, four wheelers, those types of things. Real estate, houses, cabins, anything can be put into a trust. Bank accounts, stocks, intellectual property, patents, copyrights, trademarks, all of those types of things can be owned by a trust.
What Are The Steps Needed To Put Some Real Estate Into A Trust?
There are some things that people should be aware of. If they are not financially secure, meaning that they don’t really have a lot of savings and are barely getting by living paycheck to paycheck, and maybe they don’t have an emergency fund, they probably ought not to put their house into a trust. The reason for that in Utah you get what is called homestead exemption meaning that a certain amount of your house is exempt from creditors. If a creditor came calling or came after you, you wouldn’t be able to exempt the property if it was owned in a trust. A trust is not considered exempt property. You can only exempt something that you personally own as far as real estate is concerned.
Right now in the state of Utah, that’s to the tune of $30,000 per person. If you are a married person, there will be $60,000 of equity in the house that you get to protect. You lose that exemption once you put your property into a trust. However, if you are financially secure, you really don’t need to worry about that homestead exemption. What’s more important is preserving the legacy and preserving the assets for the future. In that case, you definitely should put the property into the trust. The steps that are required to essentially transfer the deed can be done by a warranty deed or a quick claim deed. Most of the time, we do a quick claim deed. And of course, it needs to be done properly.
If there is a typo or if there is a mistake in it, the county or court of law will reject it. However if the county doesn’t reject it, and it gets recorded but it’s still incorrect, that could create a problem later. Real estate, because of the high value, should be transferred with the assistance of an attorney just to make sure it’s all done correctly.
Are There Any Additional Steps For Out Of State Properties?
Every state has different transfer rules. Most of the times you can transfer things into what we would call a living trust or a revocable living trust without having to pay any kind of tax. However, there are states, California for one, where if you transfer things into a trust, they will reassess the property taxes and property taxes in California and some other states are very high. If you do this during a time when the economy is doing quite well, it could trigger a re-evaluation of your property which could create a very high property tax for you to pay. Nobody wants to pay any more taxes than they absolutely have to and so sometimes, you don’t want to actually record that transfer because if you do that you are going to increase your property taxes.
You want to make sure that you know what you are doing in the state that you are having it done in. If you are doing it in Colorado or Arizona, or Nevada, whatever state you are transferring property in, you want to know whether that is going to affect an increase in tax and also if there is going to be any fine or fee that you are going to have to pay in order to do the recording. In Utah, it’s a very small fee. You are looking at anywhere from a $12 to $14 fee and there isn’t going to be a reassessment of your property taxes in Utah. In other states, it’s very different, so you want to make sure that it’s done properly. Either way, you should definitely consult with an attorney before you start transferring your assets and your properties.
For more information on Maintenance Of Assets In A Trust, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (801) 876-5875 today.