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Funding Your Trust – The Critical Final Step to Complete Your Estate Plan

Funding your trust is probably the most important final step that transforms your estate plan from a conceptual framework into a robust and actionable strategy. By taking the time to identify, allocate, and protect your assets through proper funding, you provide a solid foundation for the realization of your legacy. By engaging with experienced estate planning attorneys, you can streamline the funding process, securing the comprehensive estate plan you have diligently crafted.

What Does Funding a Trust Mean?

Creating a trust involves establishing a legal entity to hold and manage your assets during your lifetime and distribute them according to your wishes after your passing. However, for a trust to serve its intended purpose, it needs to be funded.

Funding a trust refers to the process of transferring assets into the trust’s ownership. This involves retitling assets from individual ownership to the name of the trust. The goal is to ensure that the trust has legal ownership and control over the specified assets. The assets commonly involved in trust funding include real estate, financial accounts, personal property, and other valuable items. 

Properly funding a trust is essential for it to fulfill its intended purpose, such as avoiding probate, providing for beneficiaries, and facilitating a smooth transfer of assets according to the terms outlined in the trust document.

The Significance of Funding Your Trust

Asset Protection

Funding your trust provides a layer of protection for your assets. By placing them within the trust, they become subject to the trust’s terms and conditions, safeguarding them from potential challenges or disputes.

Probate Avoidance

One of the primary advantages of establishing a trust is the potential to avoid probate. Probate is a legal process that validates a will and oversees the distribution of assets. By funding your trust, you enable a seamless transfer of assets outside of probate, saving time and costs for your heirs.

Privacy Preservation

Probate proceedings are a matter of public record, exposing your estate details to the public. By funding your trust, you maintain a higher level of privacy, as the distribution of assets occurs privately within the framework of the trust.

Ensuring Smooth Succession

Funding a trust ensures that the assets are readily available for distribution according to your specified instructions. This facilitates a smoother succession process, minimizing delays and complications for your beneficiaries.

Getting started on estate planning is commendable. You have already outlined your wishes and protected your assets. You should speak with a trusted estate planning lawyer as soon as possible to make sure your wishes are turned into reality upon your passing. 

Key Tips to Fund Your Trust and Complete Your Estate Plan

  • Conduct a comprehensive review of your assets, identifying those aligning with your estate planning goals.
  • Consult with an experienced estate planning attorney to handle the legal processes, especially for real estate transfers.
  • Regularly review and update beneficiary designations on financial accounts and insurance policies to align with your trust.
  • Contact financial institutions promptly to re-title accounts in the name of the trust.
  • Strategically transfer ownership of valuable or sentimental personal property to the trust.
  • Engage in ongoing discussions with legal and financial professionals to adapt your trust as circumstances change.
  • Create customized funding strategies for each asset type.
  • Inform successors and trustees about the existence and details of the trust, ensuring they understand its purpose.

How Can an Attorney Help with Funding Your Trust?

An experienced estate planning lawyer can play a vital role in assisting with the funding of a trust. Here’s how:

  • Asset Review: Your attorney can conduct a comprehensive review of your assets to identify those that should be transferred into the trust. This includes real estate, financial accounts, personal property, and other relevant assets.
  • Legal Guidance: They can provide legal guidance on the proper procedures for transferring different types of assets into the trust. Real estate, for example, may require specific documentation and legal processes.
  • Document Preparation: This may include drafting deeds for real estate transfers, preparing assignment documents for personal property, and ensuring that the necessary paperwork is completed accurately.
  • Financial Account Coordination: Your lawyer will coordinate with financial institutions to ensure the proper re-titling of accounts in the name of the trust. This may involve updating beneficiary designations on bank accounts, investment portfolios, and retirement plans.
  • Coordination with Other Professionals: They will collaborate with other professionals, such as financial advisors or accountants, to ensure a seamless transfer of assets and to address any tax implications associated with the funding process.
  • Resolution of Legal Issues: Your attorney will address any legal issues that may arise during the funding process, such as resolving title discrepancies for real estate or handling legal requirements for specific asset transfers.
  • Ensuring Compliance: The law firm you retain will ensure that the funding process complies with state laws and regulations. Different states may have specific requirements for the transfer of certain types of assets, and an attorney can help work through these complexities.
  • Post-Funding Review: Your lawyer will conduct a post-funding review to ensure that all intended assets have been successfully transferred into the trust. This helps identify and address any oversights or discrepancies.

Choose a Dedicated Estate Planning Lawyer to Protect Your Rights

The estate planning lawyers at Johannesmeyer & Sawyer, PLLC bring a wealth of knowledge and experience to address your specific concerns related to trust funding and estate planning. We have successfully assisted numerous clients in creating robust, customized estate plans that withstand the test of time. To request your free and confidential consultation, call us at 803-396-3800 or complete this online form.