What in the heck does “fund” a Trust even mean? When I first heard this term years back it confused me. Let me attempt to describe this in layperson terms 🌞
FYI, there are times when having a trust can give you a false sense of security. Having a trust is one thing, funding a trust is an additional step. This extra step deserves attention if you have a trust or are thinking about getting one.
Funding a trust is simply the process of transferring assets into a trust you’ve created. It’s not as complicated as it might sound, really! Consider this overview of steps to take to actually transfer your assets!
Photo by Alex Shute on Unsplash
What is a Trust?
A trust is a legal arrangement where you (the grantor) transfer ownership of your assets to a trustee, who manages them for the benefit of your chosen beneficiaries. It’s like creating a safe container for your wealth.
Why Fund a Trust?
Funding a trust ensures that your assets are distributed according to your wishes, potentially avoiding probate, reducing taxes, and providing privacy.
How to Fund a Trust?
- Retitle assets: Change the ownership of your bank accounts, investments, and real estate from your name to the trust’s name.
- Transfer personal property: Create a list of valuable items (jewelry, artwork, etc.) and formally transfer ownership to the trust.
- Update beneficiary designations: For life insurance policies and retirement accounts, consider naming the trust as a beneficiary.
- Business interests: If you own a business, transfer some or all of your ownership to the trust. Intellectual property:
- Transfer copyrights, patents, or trademarks to the trust.
Common Mistakes to Avoid
- Forgetting to transfer assets: An unfunded trust won’t work as intended.
- Incorrect titling: Ensure assets are properly retitled to the trust.
- Overlooking certain assets: Don’t forget about digital assets or future inheritances.
Remember, funding a trust is an ongoing process. As you acquire new assets, consider whether they should be added to your trust. Consult with a legal or financial professional to ensure you’re funding your trust correctly and in a way that aligns with your overall estate plan.
Photo by Brett Jordan on Unsplash
Double Check
If you have a Trust, it’s a good time to double-check if your Trust is funded and who you’ve named as beneficiaries on all your accounts.
Count me in as a 2nd set of eyes if you’re uncertain about what you have and what would help you. Reach out via Email or Message me if you have any questions. For additional information about my work check out @ The Living Planner or @ The Living Planner.
To consider some things to consider earlier vs. later, my book The Living Planner (What to Prepare Now While You Are Living) is a resource for you. Here is a direct link to my shopping cart. Check it out HERE . For those who prefer to access information via an online portal, I’ve created a step-by-step 12-Module DIY method: Check it out HERE.
Sharing this quote, “By three methods we may learn wisdom: First, by reflection, which is noblest; Second, by imitation, which is easiest; and third by experience, which is the bitterest.” – Confucius
Contingency Planning combines these 3 methods. Reflect, Imitate, and Experience. Let’s do this ❣️Lynn
#Can’tPredictCanPrepare #PlanfortheUnplanned