You have most likely heard of a trust. It is a fiduciary relationship in which an entity (trustee) holds the property on behalf of one or more beneficiaries. The trustee is responsible for administering the trust according to its terms and for the benefit of the beneficiary or beneficiaries. The person that creates the trust is the trustor, and the trustor and trustee can be the same person.
Many people create trusts as part of their estate plan, as they come in different forms and can be utilized to meet many estate planning goals. Problems arise, however, when the trust is not properly funded.
Funding a Trust Explained
A trust holds assets that are placed into it by the trustor. The trustor places the assets into the trust by titling the asset in the name of the trust rather than the name of the individual trustor. How this is accomplished depends on the asset. Therefore, it is best to speak with an attorney with experience in estate planning to find out how best to fund a particular trust. Common ways to fund a trust are listed below.
In order to fund a trust with real property, such as land, a home, or a vacation home, it is necessary to deed the property into the name of the trust. The key is to take it out of the individual’s name and title the property in the name of the trust. If the property is mortgaged, it may be necessary to obtain permission from the mortgage company before the deed can be executed and recorded.
Bank accounts may be used to fund a trust. It will be necessary to retitle the name on the accounts into the name of the trust. It is important to check with a banker to see if any other documents must be signed as well, such as new signature or ownership cards. Money market accounts and certificates of deposit will also need to be changed into the name of the trust.
Valuable Personal Property
Most personal property, such as artwork or jewelry, has no formal title. While it is best to speak with an attorney regarding the proper way to transfer valuable property into a trust, it is typically accomplished by executing a general transfer document that states that the trust now owns the property.
Investment Accounts and Securities
For stocks, equities, and bonds, it is important to speak to the financial advisor and inquire regarding the paperwork that will need to be completed to have the title to the accounts changed to the trust.
Consult With An Experienced Trust Attorney
If you have questions about estate planning, or specifically about properly funding a trust, contact the attorneys at Martin Law Firm, P.L. We have the experience needed to provide you with the guidance and advice you are looking for. We may be contacted by calling 239-323-9820 or via our contact page.