The Critical Final Step in Estate Planning
If you’ve created a Revocable Living Trust, you’ve taken an important step in protecting your estate and avoiding probate. But unless your trust is properly funded, it may not work as intended. Funding is the crucial final step in any Living Trust strategy, yet it is the most common reason estate plans fail.
What Is Trust Funding?
Trust funding is the process of transferring ownership of your assets from your individual name into the name of your Revocable Living Trust. It also involves updating beneficiary designations on certain accounts (like life insurance or retirement accounts) to point to the trust or specific individuals.
“An unfunded trust is like an empty safe; it offers protection, but there is nothing inside to protect.”
Why Funding Matters
Even a well-drafted trust won’t avoid probate if it isn’t funded. If your assets remain in your individual name at the time of death, they may still need to go through the court-supervised probate process. Funding ensures the trust actually controls the assets it is designed to protect and distribute.
Common Assets to Fund
- Real Estate: Primary residences, vacation homes, and rental properties via a new deed.
- Bank Accounts: Checking, savings, and CDs must be retitled.
- Investment Accounts: Non-retirement brokerage accounts should be transferred.
- Business Interests: Shares in LLCs, partnerships, or S-Corporations.
- Personal Property: High-value items, vehicles, or art collections via an assignment of property.
Ensure your trust is fully functional. Contact Fishbein Law Group for a comprehensive trust funding review.
