What Happens If You Don’t Fund Your Trust?

Once you’ve worked with your estate planning attorney to put together a carefully designed estate plan, it’s usually your responsibility to “fund” the trust.

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What is meant by funding a trust?

Funding a trust is simply transferring assets into your trust.

If you have a trust, you will want to put your assets in the trust, by retitle bank accounts, re-appointing life insurance beneficiaries, etc. We guide our clients through the process, but usually we recommend that clients make the transfer themselves.

If the client fails to make the transfer or fails to properly title it, the assets will not become part of the trust.

This means that assets outside the trust still have to go through a probate court. Any assets in your own name will require probate administration.

Administration of wills is expensive and can be time consuming. Avoiding wills is one of the main reasons people like to use trusts. Failing to fund your trust is unfortunate, because you’ve taken the time to set up your trust, pay off your trust, and then your assets still have to cover the cost of the will.

Furthermore, if those assets are not in your trust, they will not follow your desires that you set in the trust.

If you are having trouble funding your trust, work with your attorney.

We help our clients understand the funding process and know exactly what they need to do to complete the funding. However, if our clients do not wish to fund their own trust, we offer a funding service.

It is important to know that your trust is a living document that will require careful care throughout your life to reap the full benefit of your trust. You need to ensure it is updated to reflect your wishes and assets, and is fully funded.

Once you’ve gone through the initial funding process, additional assets are easy to transfer because you’ll know what to do and only have to make transfers when your assets increase.

Let us know if you have any questions about housing plans or funding your trust.

Contact us today to help you get the right paperwork or to update your current property package. We will plan so you don’t have to worry about your future.

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