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"Close... But No Cigar" - Failing to Properly Fund a Living Trust

Occasionally, I’ll consult with a new client (or possibly the family of a decedent) who had a trust created years ago. When the trust was created, their intentions were great. On its face, the trust typically looks pretty good, nearly every issue/scenario is addressed. In many instances, however, there’s one HUGE PROBLEM… The trust is completely useless. Yes, you read that right… absolutely useless.


Here’s why… Despite the clients’ best intentions and efforts (and money invested) in creating a trust, their assets were never placed in the trust. THE TRUST WAS NEVER “FUNDED!”

One of the most important steps in creating an effective estate plan that avoids the significant time and expense of probate is to properly “fund” a trust. Unfortunately, many people forget this critical step, or their prior attorney neglects to ensure that funding is completed properly.


SO WHAT DOES "FUNDING" LOOK LIKE? Here are a few examples. Real property (homes and land), for instance, should be deeded into the trust. (Although other asset protection planning techniques should be considered if you own more than just a homestead.) Bank accounts and investment accounts (other than IRAs and 401Ks) should be retitled in the name of the trust, or the trust named as beneficiary. And personal property, business assets, promissory notes, and other personal contracts should be legally assigned/transferred to the trust. It sounds a bit complicated, but it’s really not.


Don’t make the big mistake of failing to properly fund your trust. It’s too important to “come up short.” Please contact me for a free consultation to ensure your trust is properly funded. You can reach me at (813) 244-7758 or Ross@RossSpanoLaw.com.


Cheers!


Ross Spano


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