Trust Funding

Trust funding is one of the most important steps when creating a trust, yet it is also one of the most misunderstood trust fundingand poorly implemented.  While planning one’s estate, a trust is often created to avoid probate.  Probate is the public, often costly and time-consuming court process after you die to ensure your debts are paid and your assets are distributed accordingly.  All of the careful planning to provide for loved ones after your death, and thoughtful consideration put into how your assets are to be distributed will be for nothing if you do not fund your trust properly.  One of the worst conversations we have with clients after their loved ones pass is when they bring in the fancy estate planning binder that was left for them with the intent to “take care of everything”, only to find that the plan laid out on those beautifully tabbed & divided pages in that binder has failed because of improper trust funding.

The Basics

Trust funding is simply the process of transferring your assets from you to your trust.   This is done by retitling assets from your name(s) to the name of your trust.  Don’t worry, you’re not giving up control of your assets!  As long as you are listed as the trustee, you have complete control.

Taking Inventory

Taking inventory of your assets sounds pretty straightforward, but often people just don’t know where to start.  In addition to your personal belongings, be sure to detail things such as –

  • Your Home, Land & other Real Estate
  • Bank, Credit Union & Investment Accounts
  • Safe Deposit Boxes, CDs, Stock Certificates
  • Life Insurance
  • Business Interests

Not all assets will be transferred into the name of your trust.  Some assets are better left out, and others simply cannot be transferred.  Every situation is unique, so working with an estate planning attorney is key to determining what should and should not go into your trust.

The Process

The retitling process varies depending on the asset type, but your attorney will provide you with instructions for each and be there to help with those that are more complex.  Many institutions have their own document that you will complete to retitle an asset or account, making the process that much easier.  Others may require written and certified instruction from you with exactly how you want the asset to be retitled.  Some may even want proof that your trust exists.  In those situations your attorney will provide you with a Certificate of Trust; a simple document verifying your trust’s existence and listing the trustees and their powers with regards to the trust.  The Certificate of Trust will not reveal any details about the assets in your trust or about your beneficiaries.

Assets Left Out

In addition to those assets that you and your attorney have determined are best left out of your trust, there may be assets that you forget about while going through the trust funding process.  Don’t worry.  Just make sure your attorney drafts a “pour over will”.  This type of will is like a safety net for those forgotten assets, transferring them into the trust to be distributed according to the instructions in your trust.  Then, of course, there will be assets that you purchase after the initial trust funding.  No problem.  Try to title the asset in the name of the trust when you first acquire it, otherwise simply retitle it immediately after.

Your trust can only control the assets you put into it.  Signing your trust document and then not retitling assets to properly fund it doesn’t help you avoid probate or allow your trust to control anything.  If you’ve taken the time to work with an estate planning attorney to create a trust, then make funding it a priority, while you’re still able to do so.


About Oakstone Law, PL

Oakstone Law PL was founded by Bob Kleinknecht. A member of the Florida Family Trust Company Subcommittee, the Estate Tax & Trust Planning (ETTP) Committee and the Real Property, Probate & Trust Law (RPPTL) Section of the Florida Bar, Kleinknecht has 15 years’ experience.

Prior to founding Oakstone law, he spent more than eight years serving as a personal, in-house estate, tax and charitable planning attorney for a Forbes 400 family in New York and Florida. Before that, he was an estate planning and estate settlement attorney with prominent firms in Boston and Washington, D.C. after beginning his career with a boutique firm in Naples, Florida.

Licensed in Florida and Massachusetts, Kleinknecht has developed a practice model that eliminates billing by the hour and offers a streamlined, customized client process supported by technology, security and a personal approach.

For more information on Oakstone Law, click here. To get in touch with us, click here to send us an email, or call 239-206-3454.

 

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Oakstone Law
1415 Panther Lane, Suite 439
Naples, Florida 34109
Tel: 239.206.3454