What is "Funding" Your Trust?

A revocable living trust can be a powerful estate planning tool, but just creating one isn't enough. To truly reap the benefits, you need to fund it, which means transferring ownership of your assets into the trust.

Here's an analogy: Think of your trust as a safe deposit box. You create the box (the trust document), but if you don't put your valuables inside (funding), it remains empty and offers no real protection.

Here's why funding your revocable living trust is crucial:

Avoids Probate: One of the main advantages of a trust is bypassing probate, a lengthy and potentially expensive court process that distributes assets after your death. If your assets are not in the trust, they go through probate, causing delays and potential public exposure of your financial situation.

Ensures Smooth Management: With a funded trust, you designate a successor trustee who manages the assets upon your incapacity or death. This avoids the need for court intervention and ensures your wishes are carried out efficiently. Imagine your loved ones not having to deal with legal hurdles during an already difficult time.

Maintains Privacy: Assets held in the trust generally avoid probate, which is a public process. This keeps your financial details private, unlike probate which can expose the value and distribution of your assets.

Flexibility and Control: Funded trusts offer more flexibility than unfunded ones. You can set specific conditions for asset distribution, manage them for beneficiaries' benefit (like protecting them from creditors), and even name guardians for minor children.

Here are some additional points to consider:

• Funding can be gradual: You don't have to transfer everything at once. Start with key assets like bank accounts, investment accounts, or real estate (depending on your state laws).

• Seek professional guidance: A lawyer specializing in estate planning can advise you on the best way to fund your trust based on your specific circumstances and assets.

• Review regularly: Your financial situation and goals may change over time. Regularly review your trust and funding to ensure it remains aligned with your wishes.

By funding your revocable living trust, you're taking an important step towards a smoother and more efficient estate. It provides peace of mind knowing your assets are managed according to your wishes and that your loved ones are taken care of during a difficult time.

I have been an estate planning attorney and wealth manager for nearly 25 years. I offer a free consultation, which includes a Trust check-up and funding audit. To schedule this with me, call 801-377-9787 or set an appointment on my calendar here: