If you have, or are considering, a Revocable Living Trust, it’s important to know that having an effective trust is takes more than one step. It’s not enough to just have your attorney draw up your trust agreement and sign it – you also have to fund your trust.
Funding your trust means transferring property out of your individual name, and into the name of the trustee. Any property that is owned by the trust falls under the terms of the trust and is within the control of the trustee. So, he or she can manage that property according to the terms of the trust if you become disabled. He or she can also distribute the trust property to your beneficiaries when you pass away.
On the other hand, property that hasn’t been transferred into your trust is outside of your trustee’s reach. So, if you become disabled, a conservator may have to be appointed to manage property that hasn’t been funded into your Revocable Living Trust. And property that’s left out of your trust at the time you pass away may be subject to the probate process.
There are certain types of property that can’t – or shouldn’t – be transferred to your Revocable Living Trust. Your estate planning attorney can give you more information on what property should, and should not, go into your trust. He or she can also help you with the process of transferring assets to your trustee.
Stephen A. Mendel, Estate Planning Attorney
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