Whew! That’s finally done!

TrustWe stopped procrastinating and now have revocable trusts to protect the heirs to our estate. It cost us some lawyer money but hey, we can relax now knowing our intended beneficiaries are taken care of….

NOT SO FAST…

For any benefit, the trusts have to be funded.

Many trust attorneys prepare the trust documents but do not provide any follow through or guidance on the funding of the trusts.

There is more procrastination on trust funding than there is on the initial trust set-up.

It took us 2 years to finally fully fund the trusts and we are usually on top of these things.

Why the procrastination?

Trusts, estate planning and the like remind us of our own mortality. We would start with good intentions, get bored or start blocking and move to a good book or a crossword puzzle for a while…funding the trust went right back into the personal pending file.

What does funding a trust mean?

It really means changing the title or ownership of all of your assets in the name of your trust.

Assets include:

  • Bank accounts
  • Homes and Real estate investments
  • Stock and bond investments
  • Businesses
  • Anything of value in your estate

Why is retitling so important?

  • Probate – your property that hasn’t been retitled may go through probate . This may take a long time, be a lot of trouble and cost more in legal fees and taxes.
  • Control of assets. If you become mentally incapacitated, children or other heirs may be subject to a court-supervised guardianship or conservatorship to manage the assets that were not retitled to the trust. If the assets were not in the trust, your chosen trustees you have no rights or control over these assets.
  • Your Trust beneficiaries may not get the assets you intended for them – assets held outside of the trust may pass by other means. In some cases, assets intended for your trust heirs may go to someone else.

In summary- an unfunded trust is not worth the paper it was written on.

It is a bit more work for you but must be done – otherwise you have just wasted all the $ you spent on legal fees for creating the trusts.


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