Funding your trust is the crucial step to making sure your estate plan works when the time comes. If you have an estate plan, you’ve already taken a crucial step in ensuring that your assets and property are distributed according to your wishes after you pass away. However, simply creating an estate plan is not enough. One of the key elements of a comprehensive estate plan is funding your trust.
Why Funding Your Trust is So Crucial
Funding a trust means transferring assets into it so that they can be distributed according to your wishes. When it comes to putting your assets into your trust, you need to review all your assets and accounts and determine which ones need to be transferred to your trust. Your assets will need to be retitled into the name of the trust. Some assets may only require a change of beneficiary designations versus retitling This is important for a number of reasons.
First and foremost, funding your trust ensures that your assets will be distributed according to your wishes. Without proper funding, your assets may be subject to probate, which can be a time-consuming and expensive process. By funding your trust, you can avoid probate and ensure that your assets are distributed to your beneficiaries in a timely and efficient manner.
Secondly, funding your trust can help you reduce estate taxes. By transferring assets into your trust, you can take advantage of certain tax exemptions and deductions. This can help you reduce your overall tax liability and ensure that more of your assets are passed on to your beneficiaries. Keeping the value of your estate in the hands of your loved ones.
Finally, funding your trust can help you protect your assets from creditors. If you have creditors or potential creditors, funding your trust can help shield your assets from them. This can help ensure that your beneficiaries receive the full value of your estate.
So, why isn’t your estate plan finished until you fund your trust? Simply put, an unfunded trust is useless. If you create a trust but don’t transfer any assets into it, it has no power or authority. Your assets will still be subject to probate and your beneficiaries may not receive the full value of your estate.
To ensure that your estate plan is complete, you need to take the crucial step of funding your trust. This means transferring assets into the trust, such as bank accounts, real estate, and investments. It’s important to work with an experienced estate planning attorney in your area to ensure that the funding process is done correctly and effectively.
In addition, it’s important to regularly review and update your estate plan, including your trust funding. As your assets and circumstances change over time, your estate plan needs to reflect those changes. Regularly reviewing and updating your estate plan can help ensure that your wishes are carried out and your beneficiaries receive the full value of your estate.
In conclusion, funding your trust is a crucial step in ensuring that your estate plan is complete and your assets are distributed according to your wishes. Without proper funding, your trust is useless and your estate plan is incomplete. By working with an experienced estate planning attorney and regularly reviewing and updating your estate plan, you can ensure that your assets are protected and your beneficiaries receive the full value of your estate.
If you need help with setting up your trust or funding it, please contact us. If you are in Illinois or Wisconsin, we are here to help!
Disclaimer: This article is intended to serve as a general summary of the issues outlined therein. While this article may include general guidance, it is not intended as, nor is a substitute for, qualified legal advice. Your review or receipt of this article by Lexern Law Offices, Ltd. (the “LLG”) or any of its attorneys does not create an attorney-client relationship between you and the LLG. The opinions expressed in this article are those of the authors of the article and does not reflect the opinion of the LLG.