Funding a Trust
What Does Funding a Trust Mean?
Funding a trust means to place something of value, such as cash or property, into a trust. Initial funding occurs at the signing of the trust. Personal property, like furniture and clothing, is assigned to the trust in a broad assignment. Sometimes there are also one or more deeds assigning real property to the trust at the signing. We provide instructions and follow up on change the names for accounts and how to move other property into the trust. We invite our clients to call us when they acquire future substantial property to determine whether it should go in the initial trust or whether another strategy should be used.
Who is Ultimately Responsible for Funding a Trust?
We make sure the trust is initially funded so that it is a valid and existing trust. After that, it is up to the client to fund the trust with other property according to our instructions or to call us if they have any questions or if they acquire future substantial property to determine whether it should be placed in the initial trust or whether another strategy should be used.
What Happens If a Trust is Not Funded?
A trust must be funded with some valuable consideration at the time it is created to be a valid trust. Thereafter, if there is substantial property that is not assigned to the trust, it may require that part of the estate to be probated in the court system. One of the goals of a living trust is to avoid the expense and public exposure of a probate action.
What Assets Can I Put in a Trust?
Most people put all of their personal property, bank or brokerage accounts, and their homestead in a revocable living trust. Depending upon the situation, we may set up separate trusts for property such as rent houses.
Is There Anything I Cannot Put in a Trust?
Some types of property, such as IRA’s and other tax-deferred plans, are not owned by a trust, but a trust may be designated as a beneficiary.
Is There Any Sort of Look-Back Period for Putting Assets in a Trust?
There is a 60-month look back period for uncompensated transfers. Moving property into an irrevocable trust can trigger the look back period.
Can I Add New Assets at Any Time to My Trust?
Yes, you can assign other assets to your trust as necessary. We encourage our clients to call us if they have any questions about future assignments of property to the trust.
Do I Need to Re-Title Assets to Add Them to My Trust?
Real property needs to be conveyed to the trust with a deed. Vehicles can be titled in the name of the trust. We advise our clients on whether to assign a vehicle to a trust depending on the situation.
What is the Process for Funding a Trust?
Funding is accomplished by signing an assignment of property, by signing a bill of sale naming the trust as the purchaser, by executing deeds for real property, by changing the ownership of accounts, and sometimes by a contribution of cash.
Is the Funding Process Difficult?
It is not difficult to fund a trust. The value can come from any type of property.
How is Real Estate Placed into My Trust?
Real estate is placed in the trust by signing a deed naming the trust as the owner.
Do I Need an Attorney to Assist Me in Funding My Trust?
We provide instructions on how to assign property to your trust. We encourage our clients to call us if they have any questions about future assignments of property to the trust that we created for them.
For more information on Funding a Trust in Texas, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (512) 288-3200 today.