Trust Funding

You Created A Trust... Now What?

When creating a revocable trust, it is important to understand how to transfer assets to your trust. We call this process “trust funding”. To obtain the benefits of probate avoidance, it is very important that the trust be properly funded during your lifetime. You should transfer your property to the trust as soon as possible. If you unexpectedly pass away and assets have not been transferred to your trust, you may be required to initiate the probate process.

All transfers of ownership must be accomplished by executing appropriate instruments of transfer. For example, real estate should be transferred to the trust by a deed, bank accounts by changing the name on the accounts, and non-IRA brokerage accounts by retitling in the name of the trust.

Real Estate

A deed is required to convey interests in real estate to your revocable trust. In the future, should you acquire any additional real estate, you should purchase and title such real estate in the name of your revocable trust. Importantly, if you transfer your homestead to your revocable trust, you must reapply for the homestead tax exemption after your property has been transferred to your trust. The property appraiser’s office in the county where your homestead is located will need a copy of your trust to prove that you are entitled to the homestead tax exemption.

Financial Accounts

It is important to change the name on each bank, brokerage, and money market account that you wish to be owned by the revocable trust. The financial institution will want to see a copy of your trust or the Certificate of Trust to verify the trust exists. It is recommended that after the name change takes place, you check your account statements to ensure they reflect the name of the trust as the account owner. If you have a safe deposit box, you may want to change the registration. This can avoid a probate proceeding following death which may otherwise be required to open the box if the deceased is the only authorized name on the box.

We Can Help

If you have questions about funding your trust or want assistance in the process, we can help. Join us for a free seminar to learn about trust funding and maintenance programs.