Funding Your Trust
A trust controls the assets which is titled to it. This is called “Funding the Trust”. Funding a trust is the act of retitling the asset from your name into the trust name. Think of your trust like a box. The words that make up the trust form the sides of the box. In the beginning, there is nothing in the box. But the trust is designed to hold all your assets. So, funding the trust is the process of changing the names on your assets to reflect the trust name.
A properly, and fully, funded trust ensures that the benefits that your trust provides will be adhered to. You will avoid the issues that a death probate may bring, but it also eliminates the need for a conservatorship if you were to become incapacitated.
Each asset that you currently own has its own way to get retitled – from change of owners forms, to deeds, to actual titles. Making sure that the rights steps are taken is critical for your estate plan to work properly today, as well as in the future (when you really need it).
The first step is to identify all of your assets. List the name of the asset, the type of asset, and the institution, if applicable. The second step is to identify how each of those assets is currently titled. – this tells you the current ownership. And then finally for all the assets not properly titled in your trust, you simply select the appropriate change form and process that change.
The importance of funding your trust completely and accurately will make the difference as to how well your estate plan works when that time comes.
By James P. Plitz, Attorney at Law