The Importance of Funding Your Revocable Living Trust
In order for your Revocable Living Trust to function properly, your trust agreement must be signed and properly funded. Specifically, “funding a trust” means to take the assets that are in your name or in joint names with other individuals and retitling them into the name of your Revocable Living trust. Alternatively, you can take the assets that require a beneficiary designation and rename your trust as the primary or secondary beneficiary of those assets.
The goal of funding your Revocable Living Trust is to make sure that your property is governed by the terms of the trust agreement. In the event that you are to become incapacitated, your Revocable Living Trust will allow the person you select as your trustee to manage all of the accounts that are held in the name of the trust. If you pass away, your trustee will then be able to manage all the accounts held in the name of your Revocable Living Trust and transfer your assets to the beneficiaries named in your trust agreement.
Here are 3 reasons why you must not only sign, but also fund your Revocable Living Trust:
- Any assets that are held outside of your Revocable Living Trust can’t be managed by your trustee; he or she will not have any power over the property that has not been retitled in the name of your trust. If you become incapacitated, your family and loved ones may have to establish a conservatorship or court-supervised guardianship in order to manage any of your assets that are not held in the name of your trust.
- Assets that are held outside of your trust may need to go through probate which ultimately defeats one of the main benefits of creating your Revocable Living Trust.
- Your intended beneficiaries may not receive assets held outside of your Revocable Living Trust. After your death, property that is held outside of your trust can’t be distributed as described in the trust agreement. Consequently, assets held outside of your trust may have to be passed, by rights of survivorship, to the other individuals named in beneficiary designation forms.
If you do not fund your Revocable Living Trust, it is a worthless document. Work with a trusted estate planning attorney to create your Revocable Living Trust and take the time to retitle all of your assets in the name of your trust. The experienced estate planning attorneys at Fingeret Law in Pittsburgh can help you to create and fund a Revocable Living Trust that fits your particular financial needs and family situation.
To discuss your specific needs and to find out how we can help, please call us at (412.281.8222) or contact us online.