The Importance of Funding a Trust

Funding a revocable living trust ensures that the settlor’s property is governed by the terms of the trust agreement (the settlor is the person who created the trust). Funding a trust is the process of transferring your assets into the ownership of your trust. To do this, you change the titles of your assets from your name to the name of your trust. In some cases, you are only changing the beneficiary of the asset to your trust.

If your goal in having a living trust is to avoid probate at death and court interference at incapacity, then you must fund your trust. If you have signed your trust agreement but have not changed titles and beneficiary designations, you are unlikely to avoid probate. When properly prepared and funded, a trust can avoid the public, costly, and time-consuming court processes at death and incapacity. Your trust may be great, but until you fund it, it does not control anything. This is why it is important to fund your trust.

Some people are surprised to learn they are not finished when they sign the trust document. When you fund your trust, you are changing the titles now so there will be nothing for the courts to do when you die or if you become incapacitated before then. When properly funded, a trust avoids the court systems and is administered privately. Our office has provided all of our clients with detailed instructions regarding either changes of ownership or changes of beneficiary for each asset. Our suggestions are based on our clients’ objectives as of the date of our last meeting.