Why It’s Important to Fund Your Trust Now

Creating and having a family trust, living trust, or revocable living trust, (all names for the same legal device), helps accomplish several goals, which include succession planning cost saving, and maintenance of financial privacy. Keeping the details of your financial estate private, controlling the cash flow to your heirs, self-directing who shall inherit from your estate, managing your estate or family business without court or public intervention are all legitimate considerations.  For those that choose a trust-based estate plan, you will have an important step to complete after you receive your documents from the attorney. That step is called “funding” your trust.

Assets that are not placed in a trust cannot be managed by the trustee according to your wishes. Funding the trust is the act that accomplishes the above-mentioned goals. Essentially you will transfer your assets to the trust or make the then existing trustee the beneficiary of said assets for the benefit of your beneficiaries.  The exact mechanism differs based on the type of asset that is involved.  It can be as simple as re-titling the asset via a quitclaim deed, a Transfer on Death (TOD) designation, an assignment of interest, or a transfer of ownership. 

Failing or forgetting to fund a trust can subject your estate to probate, among other things. Probate is an involved and public court process, potentially costing your estate, and in turn your beneficiaries, a lot of money and time. Therefore, avoid these costly mistakes by not only creating but also funding your family trust.

At CVEP, we want all of our clients to be successful in achieving their estate plan goals and preventing painful unanswered questions for their heirs. Please make sure you understand your funding instructions clearly and direct any questions you may have to your assigned CVEP attorney.