Trust funding is the process of transferring your assets from you to your trust. To do this, you must physically change the titles of your assets from your individual name (or joint names, if married) to the trustee of your trust. You will also change most beneficiary designations to your trustee.
If you have signed your living trust document but haven’t changed titles and beneficiary designations, you will not avoid probate. You may have great trust, but until you fund it (transfer your assets to it), it doesn’t control anything; your living trust can only control the assets you put into it. If your goal in having a living trust is to avoid probate at death and court intervention at incapacity, then you must fund it now, while you are able to do so.
You must also fund it properly. The pages at the right will walk you through the steps necessary to fund your trust. If you have questions or need specific direction, consult your attorney, or call our office.
Funding your trust is not difficult, but it will take some time. Because living trusts are now so widely used, you should meet with little or no resistance when transferring your assets. For some assets, a short assignment document will be used. Others will require written instructions from you. Most can be handled by mail or telephone.
Some institutions will want to see proof that your trust exists. To satisfy them, your attorney will prepare what is often called a “certificate” of “memorandum” of trust.” This is a shortened version of your trust that verifies your trust’s existence, explains the powers given to the trustee, and identifies the trustees. The certificate does not reveal any information about your assets, your beneficiaries, or the distribution of the estate.
While the process isn’t difficult, it’s easy to get sidetracked or procrastinate. For this reason, some folks enlist the help of professionals. Whether you “need” help depends upon the type of estate, the type of assets comprising the estate, your expertise and health, and your comfort in performing the tasks necessary to fund the trust. Even if you don’t need it, ask for help if it will assist you to complete the task as quickly as possible. Make funding your trust a priority and keep going until you’re finished.
Might we suggest that you begin with a list of your assets, their values, and locations. Start with the most valuable, working your way down. Don’t stop with assets of little value, because even these may necessitate probate. Remember why you are performing these tasks, and look forward to the peace of mind you’ll have when funding your trust is complete. Your job well done means less work and expense for your spouse and /or family.
