Revocable living trusts must be funded to function properly. If you have established a revocable living trust, it is important for you to fund it. Otherwise, your trust will be nothing more than a stack of documents. The professionals at Elder Care Direction can help you to understand how to fund different types of trusts or refer you to a trusted partner attorney for additional help.
What it means to fund a trust
To fund a trust, you take assets that are titled in your name and retitle them into the name of your revocable living trust. You can also take assets with a beneficiary designation and name the trust as the beneficiary of them. Funding a revocable living trust allows you to make certain that your property and assets will be governed by the trust’s terms. This allows a successor trustee to manage your assets according to your wishes if you become incapacitated.
Why funding your trust is important
- There are several reasons that it is important for you to fund your trust, including the following:
- Trustees can’t manage assets that are held outside of your trust;
- Assets that are not held by your trust may have to be probated; and
- Assets that are not held by your trust may be passed to people you did not intend to receive them.
If you fail to fund your trust, it will not function to protect your assets. It is crucial for you to retitle your assets in the name of your revocable living trust. If you do not fund your trust, the time and money that you have spent with your estate planning lawyer to create the trust will be wasted. In addition to retitling assets, you should also update the designations of beneficiaries on certain types of assets such as IRAs, 401(k) accounts, and life insurance policies.
Contact Elder Care Direction
Estate planning can be complex. A good estate plan might include several types of documents such as trusts, wills, advance directives, living wills, and durable powers of attorney. Elder Care Direction can help you to understand the different types of estate planning tools so that you can decide which might be important for you. We can also refer you to one of our trusted partner estate planning lawyers if you need legal assistance. Call us today to schedule a consultation.