Absolutely, you can add assets to a trust at any time. This can be done by titling the asset from your name into the trust name. The only consideration is to make sure that you’re not titling assets in a trust name that are better left to just changing a beneficiary designation.

Is there any look back period for putting assets into a trust?

Yes, the largest look back period for putting assets into a trust is with Medicaid. As people get older and are thinking about their retirement, they are thinking about Medicare, Medicaid and social security. One of the things that you have to remember is that Medicaid has a five-year look back period. In essence, that means that any asset that’s transferred into a trust in that preceding five-year period is subject to what they call a penalty. A penalty means that you cannot transfer that asset in and qualify for Medicaid until you have absorbed that amount that was transferred in the five years.

Now, if you’ve transferred any asset into your trust longer than five years before you applied for Medicaid, then this does not apply, but if you’re in that five-year window, every jurisdiction has what they call a penalty divisor. This means that they set a rate for that divisor and divide the assets that have been placed in the trust in the last five years. It is a calculation that will give you the number of months that you’re not eligible for Medicaid due to the look back period. When you are setting up a trust and considering applying for Medicaid, you want to make sure that you understand what the penalty is.

What is the process of actually funding a trust?

When you consult with an estate planning attorney, one of the things that they will do is create a comprehensive list of assets that the trust maker has. Once you’ve decided the type of trust that you want established and have the list of assets that are to be re-titled, then you use your list as a guide to begin the process of re-titling, whether that’s in the case of re-titling objects, changing a beneficiary designation on a life insurance policy, or going to the recorder of deeds and changing the ownership of real estate from your name to the trust name.

Is funding a trust a simple process or can it get complex?

The difficult part of funding a trust is identifying all of the assets, identifying what trust is best serving the client’s purposes, and deciding which assets are going to go to the trust. Once that’s done, the majority of the work is administrative.

Is real estate handled differently when funding a trust?

Yes, real estate is an asset that everybody initially thinks about when they are talking about a trust. The goal is to avoid probating the real estate. The trust is an entity that goes on after the trust-maker has passed or is deceased; therefore, by putting real estate into a trust, you are changing the owner of the real estate. Anything that you would normally have to do to change the ownership of your house would apply, because you would need to create a new deed and file it with the recorder of deeds.

There is usually a transfer tax or a stamp tax that applies. In this case, almost all states have an exemption because you’re transferring the real estate from an owner to a trust controlled by that owner.

For more information on Adding Assets To A Trust In South Carolina, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (864) 982-5930 today.

Aaron De Bruin

Aaron De Bruin is an Estate Planning and Criminal Defense attorney serving Greenville, SC and the surrounding upstate. Aaron fights for the rights of every one of his clients works hard to make sure they are treated fairly – no matter how small or large a legal case may be.