Today, many comprehensive estate plans include living trusts. Prepared properly, a living trust is a powerful estate planning document that allows you to change it throughout your lifetime. If you neglect to fund your trust, however, the trust may actually be completely ineffective. For your trust to work the way you intended, you need to “fund” it.
What Does It Mean to Fund a Trust?
Funding a trust simply refers to placing assets in the trust’s name. You do this by taking assets that are titled in your name (or jointly in your name and others’ names) and retitling them in the name of the trust. You can also make your trust the beneficiary of certain assets. This places your assets under the terms of the trust.
You can transfer a large variety of assets into a living trust, including real estate, financial accounts, and life insurance. It’s also possible to include property such as wine, art, and other collectibles in your trust.
Assets that remain outside the trust are subject to the probate process, which can be expensive and time-consuming. The probate process is also a matter of public record. Depending on the type and size of assets involved in the estate, probate can take several months or more to complete. This is why it’s important to ensure that your trust is funded and that each asset you place in it is transferred properly.
Minnesota Estate Planning and Probate Law Firm
A trust that is not funded or improperly funded is little more than a collection of papers. If you’re interested in creating a trust, or you want to discuss an existing trust, we can help. Call the Minnesota probate and estate planning attorneys at Jeffrey P. Scott & Associates, LLC today at (651) 968-1457 today to learn more and to discuss your options.
This website has been prepared by Jeffrey P. Scott & Associates, LLC for informational purposes only and does not, and is not intended to, constitute legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.