Funding Your Trust - The Next Big Step

For many, getting their trust finished comes with a big sigh of relief - we have been meaning to do this forever and finally got it done! But, your estate plan does not end with signing the trust document. A close second in importance to signing the plan documents is funding the trust. A trust does not control what it does not own. When we speak of "funding" a trust, we mean the transfer of ownership of assets into to the name of the trust. To accomplish this goal, assets are either re-titled to the name of the trust (i.e. the ownership is changed) or, in the case of some assets like retirement plans, life insurance, and annuities, the beneficiary designations may need to be changed to name the trust as a beneficiary. Each asset must be evaluated individually to determine the approach necessary to coordinate ownership or beneficiary designations with the goals and objectives of the estate plan.Assets without proper beneficiary designation or not properly transferred into the trust prior to death or the onset of incapacity may be subject to probate or conservatorship proceedings and may not pass to a desired beneficiary. This can mean extremely negative and potentially costly consequences. Regular review and participation in trust maintenance plans can help in making sure your trust not only exists, but that it actually functions as expected.