A trust that hasn’t been funded is like a car without gasoline: both can be great vehicles for getting you where you want to go, but neither are beneficial when running on empty.
Funding a trust means to change ownership, title, or deeds to property from the individual establishing the trust to the trust itself; such that the trust becomes the owner of the transferred assets. This is done in part to assist with estate administration when the person who established the trust passes away.
What does this mean for you? The biggest reason to make sure your trust is funded is to keep your assets out of the probate process. Only those assets that are in your name at the time of your death are subject to the time-consuming, expensive and often-frustrating probate process. If all of your assets are in your living trust, your trustee can distribute those assets without probate court involvement. Furthermore, if some of your assets remain in your name, a “pour over” will, which directs the transfer of those assets to your trust upon death can keep those assets out of probate as well. This is a great way to streamline your directives and avoid many of the costs associated with your future estate goals.
The other advantage of funding your trust is that it provides for the management of trust assets by a successor trustee while you are still alive and in the event you become incapacitated. This advanced directive may avoid confusion and the potential conflicts that arise, if you become unable to manage your affairs during your lifetime.
Southwest Florida Estate Planning, PLLC – Planning for Life
I’m attorney Ed Smith. As an experienced and innovative estate planning and elder law attorney, I work with individuals and families to develop personally tailored estate plans and arrangements for that bring comfort, clarity, and peace of mind.
If you would like to discuss your questions, concerns, or goals involving trusts or any other aspect of your estate plan, please give Southwest Florida Estate Planning a call, PLLC at (239) 216-4107 or fill out our online form. We look forward to assisting you.