Quick Summary
This article answers a question we get a lot here at Blake Harris Law—“can I add assets to an irrevocable trust once it’s established?” We’ll give you a quick answer, provide some much needed context, and offer some advice for setting up a trust that meets your needs.
Adding Assets to Irrevocable Trusts
Many people wonder if they can add new assets to their irrevocable trust after it’s established.
While these trusts are designed to be long lasting, there are ways to incorporate additional assets in most circumstances. The ability to add assets depends on your specific trust terms and structure.
In this guide from Blake Harris Law, we will explore how to add assets to an irrevocable trust and what you need to know about the process.
So, Can You Add Assets to An Irrevocable Trust?
The short answer is yes.
You can add assets to an irrevocable trust after its creation, but the process varies based on your trust’s specific terms and the type of asset being transferred. Most trusts allow additions of property, investments, cash accounts, cryptocurrency, and other assets with proper legal documentation and guidance.
What Assets Can You Add to Your Trust?
As your circumstances change, you may want to add new assets to your irrevocable trust. Common assets that can be transferred to an existing trust include:
- Real property like homes and land
- Tangible personal property such as art, jewelry, and collectibles
- Intellectual property including patents and copyrights
- Business interests and ownership stakes
- Cash accounts and savings
- Cryptocurrency holdings
- Investment portfolios and securities
- Precious metals
- Financial instruments like bonds and annuities
Generally, liquid assets like cash and stocks are easier to transfer into a trust than physical property such as real estate or collectibles. However, with proper legal guidance, you can successfully transfer any of these asset types into your existing trust.
Key Steps for Adding Assets to Your Irrevocable Trust
Irrevocable trusts offer valuable long-term asset protection and tax benefits, but their strict structure means adding assets requires careful planning. Here’s what you need to know about the process:
Understanding Your Trust’s Terms
Not all irrevocable trusts are created equal. Your trust document may include specific provisions about adding new assets, or it might prohibit additional contributions entirely. Review your trust’s structure carefully to understand what transfers are permitted.
Working With a Trust Attorney
Adding assets to an irrevocable trust typically requires professional guidance to ensure proper execution. A trust attorney can:
- Review your trust terms to confirm what additions are allowed
- Prepare necessary legal documents like amendments or assignments
- Handle any required beneficiary notifications or consents
Handling Different Asset Types
The transfer process varies depending on what you are adding to the trust:
- Real Property: Requires filing a deed transfer (like a quitclaim deed) with your county clerk
- Financial Accounts: Involves working with your financial institutions to open an account in the name of the trust
- Personal Items: Usually needs a written assignment of property interest for items like jewelry or art
Tax and Financial Impact
Be aware that adding assets to an irrevocable trust may have tax implications, particularly regarding gift taxes or significant changes to the trust’s value. Consult with tax professionals to understand these consequences before making transfers.
Adding Cash-Related Assets to a Trust
To add cash, stocks, or bonds into a trust, you will generally need to contact your financial institution and follow its guidelines for transfer. This typically involves opening an account in the name of the trust.
- Bank accounts: Contact your bank and inquire about any penalties for withdrawing and transferring funds into a trust. The bank may require you to open a new account rather than changing the current account’s name to that of the trust.
- Corporate stocks or mutual funds: For stocks issued in certificate form, request a new certificate registered in the trustee’s name. Contact your broker to do so.
- Bonds: Request a new bond or debenture to be issued in the trustee’s name. If you are purchasing new bonds to add to the trust, buy them in the trustee’s name and retain proof of purchase with the trust documents.
Adding Property to an Existing Trust
If you want to add real property to the trust, you often need to file a deed with the county clerk, transferring the property into the trust. This document essentially renounces your legal title right to the property and transfers the legal interest to the trustee instead.
If you want to transfer property without any proof of ownership—such as jewelry, antiques, or other collectibles—your attorney can help you create an Assignment of Property Interest document.
Reviewing Trust Provisions Before Adding Assets
Before transferring any new assets, you’ll need to review your trust document’s provisions to ensure it allows for additional contributions.
These provisions spell out key details about:
- Who can receive trust assets
- What each beneficiary is entitled to
- The conditions under which property passes to beneficiaries
If your trust’s provisions don’t allow for the types of assets you want to add, you may need to work with your attorney to make amendments to modify these terms.
Potential Cost Implications of Managing Additional Assets
Adding assets to your trust may affect its management fees. Your investment advisor might increase their rates when handling a significantly larger asset pool, since this requires more complex administration and legal work.
However, if you’re only adding small values across existing asset types, you may not see much change in fees. Always discuss the fee structure with your trust advisor upfront. Even with higher fees, adding assets can be worthwhile if it helps achieve your asset protection or estate planning goals.
Keep in mind that managing new assets within an irrevocable trust often increases costs. If you are concerned about fees, talk to your financial advisor about scalable management solutions that could help minimize the impact.
6 Tips for Adding Assets to an Irrevocable Trust
Consider these key tips when adding assets to your irrevocable trust:
- Work with experienced attorneys who specialize in irrevocable trust modifications, as the process is more complex than with revocable trusts.
- Review your trust annually to ensure it continues to meet your goals and identify any new assets that should be transferred.
- Don’t procrastinate on transfers—any assets you intend to include must be properly moved into the trust.
- Consider a trust resettlement for major changes, which creates a new trust rather than modifying the existing one.
- Document everything meticulously, including asset valuations, transfer dates, and all communications with financial institutions and county offices.
Need Help Adding Assets to Your Trust?
Now that you understand the process of adding assets to an irrevocable trust, let Blake Harris Law guide you through the next steps. We provide qualified legal guidance for managing offshore trusts, funding them, transferring assets, and handling withdrawals—all to meet your asset protection goals.
Contact us today to schedule a consultation.
