What Does it Mean to Fund a Trust in Your Estate Plan?

  • Estate Planning
what does it mean to fund a trust in your estate plan | estate and probate legal group

We have all heard the advice to write or set up a trust before we die. What is a trust, and how do you put your assets into it? You can establish a trust to ensure your assets are distributed according to your wishes. And you fund your trust by moving your assets into the name of the trust.

How to Fund a Trust

Funding your trust is the process of transferring your assets out of your name and into the trust, and you can add personal items, bank accounts and property to your trust. To do this, you change your assets out of your name to the name of the trust account.

Let’s look at 3 examples of how to fund a trust:

  1. Your assets: transferring assets such as clothing, jewelry, electronics and furniture is don’t by signing a general transfer document. This can simply state that “the trustee of my trust now owns all my jewelry, clothing and electronics.”
  2. Bank accounts: each bank has specific rules, so contact your bank to see what is required to transfer your accounts into the trust.
  3. Property: moving your real estate to your trust often requires you to sign the deed to transfer your interest in the property to the trust. You will then record that deed with the county.

As you can see, we did not list retirement plans here. A trust cannot own your IRA while you are still living, but you can change the beneficiary from your IRA to your trust. When you pass away, your retirement funds will be given to your trust, and then the money can be given to the trust’s beneficiaries.

When you establish your trust, your estate planning attorney will work with you to fund the trust. But setting up a trust is not something that you do once and forget. It is essential to update your trust after life-changing events such as a birth, death or purchase of a new property. Actually, it’s a good idea to review and update your estate plan every 3-5 years.

When You Need to Talk to An Oak Brook Estate Planning Attorney

When you’re ready to establish your trust, contact the experienced estate planning attorneys at the Estate and Probate Legal Group. Call us today at 630-864-5835.

AREAS WE SERVE: Cook, DuPage, Kane, Lake and Will counties