July 12, 2016
The “10 Most Gruesome Estate Planning Mistakes” series. Mistake #6: Not Funding Your Trust
A trust can be thought of as a safe. It can do a great job of protecting your hard earned wealth, but if there’s nothing in the trust—i.e. nothing in the safe—what good does it do you? None whatsoever. Which begs another question, why would someone go to the trouble of creating a trust and then not fund it? The answer is quite often that the person in question simply never gets around to it. He or she procrastinates, resulting in an unfunded trust—which is worse than no trust at all because an unfunded trust sends their assets right into the court system.
What Does Funding a Trust Mean?
Funding a trust is simply the process of transferring your assets from you to your trust. To do this, you physically change the titles of your assets from your individual name (or joint names, if married) to the name of your trust. You will also change most beneficiary designations to your trust. You are essentially putting your “stuff” into your trust.
Why is Funding My Trust Important?
If you have trust, but haven’t funded the trust (transferred your assets by changing titles of your assets), you will not avoid probate. Also, your trust cannot distribute or control assets that have not been put inside it. You may have a great trust, but until you fund it, it doesn’t control anything. If the you chose a trust for the purpose of avoiding probate and/or controlling your assets after your death/incapacity, and you do not fund the trust properly, you just wasted some money.
Funding is a Priority at The Elder Care Firm
Typically, most lawyers provide you with instructions and sample letters for your other assets. However, the Elder Care Firm makes sure that your estate plan is fully integrated and effectuates the funding of your trust for you!
Get Educated
To learn more, join us for one of our FREE LifeCare Planning Workshops. Our estate planning experts will have upcoming workshops in Ann Arbor, Bloomfield Hills, Brighton, Dearborn, Lansing, Livonia, Novi, and Trenton. We promise that time will fly, you’ll learn a lot, and have a little bit of fun. To sign up for a LifeCare Planning Workshop click here.