Although a revocable living trust may serve a variety of objectives in your estate plan, there are two primary reasons for having one. The first is to insure that your property will continue to be managed for your benefit and the benefit of your loved ones if you become disabled or incapacitated. The second is to insure that your property will pass to your intended beneficiaries upon your death while avoiding the costs and delays of probate.
A revocable living trust is well suited to accomplishing those objectives. However, simply preparing the trust instrument is not enough. You must also take the necessary steps to insure that your property is in the trust at the proper time. Getting your property into the trust is a process that is often referred to as “funding a trust.”
The Role of Funding
Every trust is created to accomplish certain objectives. Some of those objectives are intended to be accomplished during a grantor’s lifetime, while others are intended to be accomplished only after a grantor’s death. Whatever your objectives might be, it is clear that they cannot be achieved with a revocable living trust unless the trust is properly funded. Funding a trust is critical to achieving the objectives of the trust.
When we say that funding a trust is critical to achieving the objectives of the trust, we do not mean to suggest that you must transfer all of your property to your revocable living trust at the very instant you sign the trust instrument. Most people are somewhat hesitant to transfer valuable properties to something they don’t fully understand. Moreover, most people have worked hard to accumulate their property and they’re not quite ready to stop living for the sake of an estate plan. So, there is a natural reluctance to transferring property to a revocable living trust. If done properly, however, the process of funding your living trust can be done painlessly and without any significant impact on your current lifestyle.
Please see our funding guide for complete information on funding methods for different assets.
For further information or to discuss your estate planning issues, we invite you to schedule a free confidential consultation with an experienced northern and southern California estate planning attorneys by calling us at 916.999.1376, or filling out our contact us form on our website. The confidential consultation is free.