If you just created a trust, you may not realize that you also need to fund it. Signing the paperwork is not your final step in getting your trust up and running. To fund the trust, you need to transfer money or property to it in care of the trustee.
Why Do You Need to Fund the Trust?
A trust works because the trust’s creator gives up ownership of money or property to a trustee. The trustee holds legal ownership and manages the trust property, while the beneficiaries will receive the benefit of the property in the future. Without funding the trust, the trustee will have nothing to manage and the beneficiaries will receive no benefit.
What Can You Use to Fund the Trust?
Any money or assets that you own can go into the trust. This includes cash, stocks and bonds, real estate, personal property like jewelry or cars, and more. Note that you should not place jointly owned property in trust because you are not the only owner. Also, do not place property already promised to someone else (such as in your will) in the trust.
How Do You Fund the Trust?
To properly fund the trust, you must transfer ownership of your property to the trustee. In other words, instead of you being the named owner, you need the owner to be “John Doe, Trustee of the Jane Doe Trust” or similar (substituting your trustee’s name and the name of your trust).
The method of transferring ownership depends on the type of property. For real estate, you need to complete a title transfer through the local recorder’s office (and potentially take other steps if you have a mortgage). For cash, you need to change the name on the bank account or transfer it to a new account. For other items, you may want a written receipt stating that you transfer ownership to the trustee.
You can seek an attorney’s help in funding your trust and completing other necessary steps to keep the trust running. Your trustee many need an attorney or other professional’s assistance to manage trust assets as well. Contact the lawyer who prepared your trust or another local lawyer to learn more.
Want to start funding your trust? Local attorney Andrew Szocka, Esq. provides thorough and speedy estate planning help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.