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Is Your Trust Funded?

Many people are under the assumption that once their trusts are executed, they do not worry about transferring their assets to the trust.

But if your trust is not funded, will it achieve its purpose? NO!

Funding means transferring your assets to your trust. It involves the following steps:

  • Physically changing the titles of your assets from your name (or joint names if you’re married) to the trust’s name.
  • Possibly changing the beneficiary designations on insurance policies and retirement accounts to your trust.

These steps are crucial in avoiding probate. Even if your attorney sets up your trust properly, the trust only serves its purpose if it is funded with your property. If your assets are not transferred to your trust, your assets will have to go through the probate process at significant expense to your estate.

Trustees can also file a Heggstad petition, which shows a trust was created and that the creator of the trust was in the process of transferring the title of his or her property into the name of the trust before his or her death. While a Heggstad petition may be the quick answer for assets left out of the trust, the process of drafting and filing a Heggstad petition is still costly to the estate, thus reducing the distribution to the beneficiaries.

The following assets should be transferred to your trust:

  • real estate
  • bank/saving accounts
  • investments
  • business interests
Don’t assume an attorney will fund a trust after setting it up. If he or she does take the necessary steps to transfer your assets, there could be an added charge.

By funding your trust prior to your death, your beneficiaries will avoid probate court. At Chauvel & Glatt, funding is a necessary step in our trust-preparation process. We will transfer your residence to your revocable trust and help you to make sure that your other investments, properties and bank accounts are placed in your trust.

To learn how our attorneys can fund your trust and keep your beneficiaries out of probate court, contact us today.


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