Creating a revocable living trust is an important step for estate planning and ensuring a smooth transfer to your loved ones. But many people overlook the crucial next step, funding the trust. If your assets aren’t properly transferred into the trust, it may not work as intended, and your estate could still go through probate.
What “Funding” a Trust Means
Funding a trust means transferring ownership of your assets, such as bank accounts, investments, or real estate, into the name of the trust or naming the trust as a beneficiary. If you don’t take this step, those assets remain outside the trust and may still be subject to probate, defeating one of the main purposes of having a trust.
Why Funding Is So Important
A properly funded trust allows your successor trustee to step in easily if you become incapacitated or pass away. It also keeps your affairs private and helps avoid the time and expense of probate. If the trust isn’t funded, however, your estate plan may fall short, the assets outside the trust may have to go through probate, and your detailed trust instructions might not apply to them.
Common Funding Mistakes
Even with a trust in place, some assets can accidentally fall outside it:
It’s wise to review how your assets are titled and make sure everything aligns with your overall estate plan. If you have a trust or are considering creating one, working with an estate planning attorney can help ensure everything is structured properly and supports your long-term goals.
Call us today to schedule a free initial consultation, (605) 275-5665.