In order for a Trust to actually work, the person creating the Trust, must get the title of their assets into the Trust. The process of putting assets into a Trust is referred to as “funding the Trust,” and is a necessary step in order for the Trust to truly accomplish its goal. In order for the Trust document to effectively help to avoid the necessity of probate, the person who created the Trust, referred to as either the Grantor or the Settlor, must take the time to transfer any assets to the Trust. I often explain to Clients that they should consider their Trust documents as a metaphorical box for all of their worldly possessions and despite the repeated warning to never do so, in this case it is best to put all of your eggs in one basket. Transferring an asset to your Trust is usually a simple retitling process changing the asset from the person’s name individually to the person’s name as Trustee of the Trust.
Once a person’s assets are transferred from themselves individually into their Trust then the Trust is free to do the job of probate avoidance. When the person who created the Trust passes away, the Successor Trustee is free to jump in and take on the task of administering that person’s estate immediately without the delay associated with the often lengthy and expensive Court process. The assets owned by the person through the Trust are not in their name as an individual and therefore are not subject to the probate process. A protective measure, called a Pour Over Will is often put in place in case the Grantor forgets to transfer all of their assets into the Trust during their lifetime. The Pour Over Will is designed to “catch” anything that was inadvertently left out of the Trust during the person’s lifetime.
- A Little Planning Can Help Avoid Trust Accounting Disputes - 02/28/2021
- What To Bring To Your Divorce or Parenting Consultation - 02/27/2021
- Tips For Setting Up Your Family Law Consultation - 02/27/2021