Funding Your Trust

Would you ever consider traveling on an airplane with empty suitcases? The very idea of paying baggage fees, and traveling without any of your personal belongings sounds absolutely preposterous. Creating a trust but not taking the time to properly fund it, is essentially the same. A trust can only protect your assets if proper designations are put in place to ensure they make it into your suitcase. We call this “funding” the trust.

Funding a trust requires a careful consideration of your wishes and the type of assets you own. You wouldn’t want to pack only ski gear for a beach vacation, right? Similarly, not all assets should be placed in a trust immediately, and some should not be placed into the trust at all. For instance, individual retirement accounts must remain in your name, and should not be re-titled into the name of the trust. Naming the trust as a beneficiary to certain accounts may even implicate unwanted tax consequences.

Understanding how important and complicated funding can be, we often schedule a separate meeting to prepare and review funding instructions for your home and financial assets. As always, please feel free to contact our office if you acquire a new asset or have questions about an existing one.