April 24, 2014. Funding is a critically important element of establishing any Trust. It’s been preached on this blog before, and will be preached again. Though funding of a Trust should be aggressive and comprehensive, special attention needs to be paid to how the assets are placed in a Trust, and whether they even should be. Retirement assets come to mind as assets that create a host of complications if not carefully accounted for.
Other assets that need to be carefully looked at are business interests, such as stock and LLC units. It is important to try and get these into a Trust because if someone owns a business, more often than not, most of their wealth is concentrated in it. When these documents come up, the corporate documentation will need to be reviewed to ensure that the transfer is permissible. This will mean reading over the shareholder’s or operating agreement, and digging out the buy-sell (if there is one) to determine its implications. Where there are multiple owners, the consent of the other owners to the transfer is usually necessary and usually is given. In the context of Revocable Living Trusts, the process is usually not overbearing, but the legwork needs to be done.
For additional information on business transfers to trust, contact the Goosmann Trust Law Counsel at info@goosmannlaw.com or call 712-226-4000.
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