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3 Assets That DON’T Belong in Your Trust

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Did you know that not every asset that you own belongs in your living trust if you have one? Hi there, my name is Miranda Dressler I am an attorney with MacKay Dressler law firm in Petaluma, California, and we practice in estate planning and elder law. 

And the vast majority of estate plans that we create for our clients are living trust based estate plans. And part of the process of creating a living trust is transferring your assets into that living trust, into trust ownership. It’s what we refer to as funding the trust. And a lot of clients are surprised sometimes that, because we beat the drum of how important that process is, because it is so important, but a lot of people are surprised that not every single asset that they own is meant to go into that Trust when it’s created. 

And the three main assets that don’t get transferred into a trust during your lifetime are retirement accounts like IRAs, 401ks, 457B’s, anything that is a retirement account like that is not something you transfer to your trust. Number two is often annuities. They’re kind of similar to retirement accounts and then life insurance policies. So, these are the three main types of assets that don’t get transferred to a living trust when it’s created. 

However, there is some nuance there and you do still want to discuss these assets with your estate planning attorney. We always want to know when our clients have these assets. We don’t want to ignore them because they do still form part of the puzzle piece of putting your living trust estate plan together. These are assets that pass by beneficiary designation, and it is something that you often can coordinate with your living trust. So, number one, always making sure that you have beneficiaries designated on those accounts. And then depending on how your living trust is set up, sometimes actually naming your living trust as a beneficiary or a contingent beneficiary on those accounts. 

So, if you have any other questions in this realm, you should contact an experienced estate planning attorney in your area. And if you like this specific type of content, please like and subscribe to our channel. Thanks.

Miranda Dressler
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