Assets you do not want in your trust

26 Jun 2024 · 1 min

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In this instructional segment, the speaker advises against directly titling certain assets—specifically vehicles and life‑insurance policies—in a living trust. For vehicles, placing the title in the trust can expose the trust (and thus the owner) to lawsuits if an accident occurs, and most states offer simpler post‑mortem transfer methods that avoid this risk. For life insurance, the speaker recommends keeping the policy in the individual's name and naming the trust as the beneficiary (or secondary beneficiary) so that proceeds flow into the trust only after the primary beneficiary predeceases the insured, thereby preserving the intended estate plan without the complications of retitling the policy itself.

Chapters

Assets you do not want to put in your living trust. Your vehicles. Don't put those in your living trust. If you've ever tried to go down to your local DMV and do that, you'll know what I'm talking about. But beyond that, if you have an accident and the person on the other side of that accident sees that your vehicle is titled in the name of your living trust, guess who's going to get sued? In addition to you getting sued individually. Most states have an easy way to transfer vehicles after death, or you you can just assign your vehicles to your living trust. If you assign them, that will not affect the title of your vehicle during your life and only comes into effect after you're gone. Next would be life insurance. Don't try to title your life insurance in the name of your living trust. Make the trust the beneficiary of your life insurance. Many people say, well, I've already got beneficiaries on my life insurance. My wife is my beneficiary, or my husband is my beneficiary. And that's fine. In that situation, you make the trust the secondary beneficiary. So if the person you named has predeceased you, It skips right over and goes into your living trust. And if you make the trust the beneficiary of your