You signed a trust document with your attorney. So are you done? No! You must now take the critical step of funding your trust.
Eight out of ten people with existing trusts haven’t properly or adequately funded their irrevocable trusts, rendering the asset protection plan or estate tax plan meaningless. Don’t let this happen to you.
People seem to think that after their attorney drafts a trust and they sign the document, they don’t need to do anything else. But that is just step one. After the trust is signed, assets need to be transferred into the name of the trust. This is what is referred to as “funding” the trust.
Almost any asset can be held in a trust, such as bank accounts, brokerage accounts, mutual funds, real property, insurance policies, annuities and stocks. The process can be as simple as re-titling financial accounts or executing a new deed in the name of the trust.
You may want to coordinate with your attorney and/or a financial advisor to determine which assets to place in the trust and which to keep outside of the trust. This analysis is different for everyone as it depends on income and expenses, lifestyle, asset protection goals, age, health and family circumstances.
Once you have chosen the assets to transfer to the trust and re-titled those assets, you need to complete the trust schedule of holdings by listing those assets. Be sure to give your attorney a copy or better yet, have your attorney complete that schedule.