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You drafted a living trust... Now what?

You drafted a living trust... Now what?


Once you've made a living trust, there's one more crucial step: funding your trust, which is just as important as creating a trust. Funding your trust is the formal process of transferring your assets from you to your trust. To do this, you must: (1) physically change the titles of your assets from your individual name (or joint names, if married) to the name of your trust and (2) change most beneficiary designations to your trust.

Forgetting to Fund Your Trust

If your trust is never funded, it will have no effect on how your property is transferred after your death. Instead, the assets you thought your trust would control will pass under your will or, if you don't leave a will, under probate laws.

Forgetting to fund a trust or leaving out valuable assets is very common. Many people assume the attorney they hired to draft the trust document will also take care of funding that trust. But that's not always the case. Thus, you must do three things to ensure your assets are transferred into the trust. First, you should review each asset with your attorney. Second, have your attorney explain the procedure of transferring assets and help you decide who will be responsible for transferring each asset. Finally, the transfers must be completed by you and/or your attorney.

Assets With Title Documents

If an asset you want to hold in trust has a document showing who owns it, then you'll need a new title/ownership document, showing that the asset is now held in trust. For example, if you want to hold your house in your living trust, you'll need to prepare, sign, and record a new deed, showing that the property is held in your trust. Real estate, stocks, bank accounts, cars, and other vehicles, copyrights, and patents are all common examples of assets with title documents.

Although most transfers may be handled by mail or telephone, some institutions require a short assignment document, a certificate or trust, or written instructions from you as proof that your trust exists. These documents verify your trust's existence and contain basic information about the grantor (the person setting up the trust), the trustee, and the date the trust was created. These documents do not reveal information about your assets, your beneficiaries, or their inheritances.

Assets Without Title Documents

Lots of assets, including many valuable ones, don't have official title documents. Personal property, such as jewelry, artwork, clothing, cameras, books, etc., typically does not have a formal title. Accordingly, personal property must be transferred by either listing it in a schedule attached to the trust or by executing a separate assignment of such property to the trust.

Although transferring assets to fund your trust may be a tedious and arduous process, it is absolutely necessary to ensure your assets avoid probate. The knowledgeable estate planning team at Atlantis Law can assist you with the onerous process of funding your trust. Please contact us today to schedule your free estate planning consultation.


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