What is Funding a Trust Anyways?

Funding a trust – we talk about it in our office all the time, but what is it anyway? It is not enough to simply sign your trust document and then tuck it way forever, never thought of again. After you create the trust, you must fund it (FUND, not FUN- though, we think trust funding is fun). Funding your trust is the process of transferring your assets (house, bank accounts, and investments) from you to your trust. This is done in many different ways. For homes and land, a deed is recorded. For your bank accounts, IRAs, and 401k accounts, the trust is named as the beneficiary. For brokerage accounts, you either change the titles of your assets from your individual name (or joint names, if married) to the name of your trust, or you change the beneficiary (this varies by institution).

Don’t worry, funding your trust does not mean you give up control. You still own all your assets. As long as you are the Trustee of your trust, you are in charge of your trust. One of the biggest benefits of a revocable living trust is that you can continue to buy and sell assets just as you do now. You can also remove assets from your trust if you ever decide to do so.

We know, trust funding can take work and sometimes it is a bit confusing. If you do not remember if you ever funded your trust, now is the time to check. Your bank, financial advisor, and investment companies can tell you if you have the trust listed as the beneficiary. If you still live in the same house you had when you created the trust, we probably have you covered. Check your binder under “Trust Property” for a copy of a recorded deed. If you are still not sure, give us a call; we can check. If you need additional help with funding or would just like to have everything reviewed, we have people in our office that are experts at trust funding. Just call and ask to schedule a funding review meeting.