Funding Your Living Trust
This blog entry explains the vital concept of funding your living trust, including explanation of the process and why it is so important.
What does “funding” mean when it comes to living trust?
In order to understand the concept of funding, imagine your trust as an empty box. In order to avoid probate, we must fill the box with all of your assets, i.e. we must fund your living trust. When you sign your living trust at our office, the box will be empty. So, our job is to both help you fund the living trust for some of your assets and instruct you as to how to fund the remaining assets into the trust box. This process is where attention to detail plays a major role. We provide the details and make it easy for you.
How does a living trust get funded?
The process is relatively straightforward and depends on the types of assets you have. However, the assets that must be funded in your living trust are your titled assets, i.e. real estate, bank accounts, IRA and 401(K) retirement accounts, brokerage accounts, cars, boats and trailers. Basically anything with a title or that is set up as an account with a financial institution.
We also need to fund your personal property…everything not listed above, including furniture, jewelry, tools, clothing. We draft a document that handles this aspect of funding.
How does Legacy Law Center help me with funding my living trust?
Our firm always funds
1. Your home(s) / real property
2. Your personal property
Your home(s) and other real property are funded by the drafting and recording of deeds. We draft the documents, you sign them, we record them, we mail them to you once they are recorded. Done. If you have three homes, we draft and record three deeds. Not a problem.
We also handle the funding of your personal property – everything you own that does not have a title – jewelry, tools, furniture, keepsakes, art, sporting goods, clothing, photos…basically everything in your house.
Your personal property is funded into your living trust with a document that we draft and you sign the day you sign your living trust.
What about funding everything else into my living trust?
For everything else, you will need to do a little bit of legwork. But don’t fret. We will provide detailed instructions on how to fund everything into your living trust, including your retirement accounts (401K / IRA / Roth IRA), regular investment and securities accounts, your bank accounts and any other types of titled assets like certificated stocks, savings bonds, boats / trailers / airplanes. If you have a financial advisor, they can also help you with the instructions and make it easy. If necessary, we’ll call your financial advisor from our office and set up an appointment for you to meet with them to handle the paperwork for those accounts.
And we keep an eye on you after you have signed the documents at our office. We’ll call a couple of months later to see if everything has been funded and the trust box is full with all of your assets. If not, we can help you complete the process. More than likely, however, the trust box will be full and we’ll be congratulating on a job well done.
