Transferring valuable personal property assets into a trust.

A trust is a legal arrangement in which trust assets are controlled and managed by a trustee for the benefit of the trust beneficiaries according to the terms of a trust. Only assets that are held in trust are controlled by the trustee. It is important to transfer assets into the trust in order to avoid court proceedings upon the owner’s incapacity or death relating to these assets.

Often this means retitling assets into the trust. Title to real property can be transferred by way a trust transfer deed. Financial accounts can be retitled with the institution into trustee accounts. However, not all assets have title documents.

Many items of personal property items do not have title. Some are valuable and should be transferred into one’s living trust. These include, but are not limited to, gold and other precious metals, artwork and antiques. Such assets, however, do not have title documents. Nonetheless, these valuable items of personal property can still be transferred to the trust for control, management and eventual distribution using an assignment.

Valuable items of personal property often do have purchase receipts that disclose the item(s), the seller and the buyer. A bill of sale related to a gold purchase can authenticate ownership. If the purchase was made outside of the trust and the settlor (trust maker) wishes to transfer ownership to the trust then an assignment of rights can accomplish that goal.

The assignment itself would incorporate details from the bill of sale – by referencing key pieces of information from the document (e.g., seller’s name, date of sale, and information about the item(s)) to evidence the settlor’s ownership immediately prior to assignment. Executing the assignment then transfers ownership to the trustee, who can then insure the valuable personal property as owner.

Other items may have registration documents that can similarly be utilized within the assignment as proof of ownership prior to the assignment of the personal property into the trust. For example, a Certificate of Cattle Brand Registration, is rebuttable proof of ownership in California. Details from the certificate itself could be expressly referenced in the assignment of the cattle to the trust.

Other items, such as collectibles (e.g., stamps, playing cards), might be catalogued by the owner, which itself would include proofs of ownership (e.g., receipts and registration), and the catalogue itself could be referenced within the assignment to say what is being transferred into the trust. Again, the purchase documents would be kept with the catalogue to prove that the settlor owned the assets.

Assets owned by a sole proprietorship are perhaps the most important example of using an assignment to transfer assets without a title. Sole proprietorship assets are owned by a business person individually or the name of the fictitious business (d/b/a). Sole proprietorship assets include a wide variety of tangible and intangible assets, such as equipment, supplies, receivables and goodwill. A specially worded assignment to the trust relating to sole proprietorships assets is then adapted as relevant to the assets.

If personal property assets are already owned by a legal business entity, however, then the settlor of a trust would simply retitle the settlor’s ownership interest (shares) in the business entity into the trust. The trust then gains control over the entity owned assets by way of owning the entity itself. The entity of course still owns and manages its assets, but the trustee as owner of the entity can control the business entity itself.

The foregoing is not legal advice.  Consult a qualified estate planning attorney for guidance. Dennis A. Fordham, Attorney, is a State Bar-Certified Specialist in estate planning, probate and trust law. His office is at 870 S. Main St., Lakeport, Calif. He can be reached at Dennis@DennisFordhamLaw.com and 707-263-3235.