Our office remains open, and in response to COVID-19, we have expanded our options for remote consultations and virtual meetings. Please contact our office to discuss what meeting option best fits your situation.

Principled Advocacy For Families And Individuals With Disabilities And The Professionals Who Serve Them

Do people forget to fund their trusts?

| Mar 6, 2020 | Firm News

People may make any number of critical mistakes while creating a trust. One of these mistakes is failing to fund the trust. While you might successfully set up a trust, if you do not fund the trust, you will end up with nothing more than an empty vessel that cannot convey an inheritance to your children or anyone that you wish to benefit from your estate. 

Forbes explains that not funding trusts might actually be one of the most common errors people commit while creating a trust. The problem is that people may focus a lot of attention on drafting the initial trust agreement but fail to take subsequent steps to fund the trust. Creating the trust agreement does not actually subject assets to the trust unless you transfer ownership of the assets to the trust. 

Placing your assets under the ownership of the trust depends upon the assets involved. If you want to place a bank account under trust ownership, you would likely need to fill out a form and supply a copy of the trust agreement or the certificate of the trust to your bank. If you want your trust to own your car, you would need to transfer the title to the trust. You would have to perform similar actions if you want your trust to own a piece of real estate. 

If the trust does not own your assets, your trustee will have no power to control what happens to them. Your assets will instead go through probate, and your will shall dictate where your assets go. Even worse, if you do not have a will or do not address the fate of particular assets in your will, it could lead to costly litigation among your heirs. While it can be easy to forget to fund a trust, taking the proper steps to fund your trust is crucial to making your trust work.