A living trust can be an invaluable tool for managing your assets, increasing privacy, and safeguarding your finances. One of its most significant advantages is that it can help you avoid the lengthy and costly probate process. However, many of those who establish a living trust fail to properly fund it, which can lead to unintended complications and expenses.
What is a Living Trust?
A living trust is a legal arrangement where a person, known as the grantor, transfers ownership of their assets into a trust during their lifetime. The grantor can then manage these assets while alive and specify how they should be distributed upon their death. This bypasses the probate process, which can be both time-consuming and expensive for your loved ones.
Common Pitfalls: The Importance of Proper Funding
Despite the benefits, many people overlook a critical step: funding their living trust. Funding a trust involves transferring your assets into it so that they are governed by the terms of the trust. Without proper funding, the trust may not function as intended, and your assets could end up in probate.
When individuals refinance their homes, lenders typically require that the property title be held in the individual’s name rather than the trust. After refinancing, it’s crucial to retitle the home in the name of the trust. Failing to do so can result in your home being subject to probate, defeating one of the primary purposes of creating a living trust.
Why DIY Trust Funding Often Falls Short
Many people attempt to fund their trusts themselves to save on costs. While this do-it-yourself approach might seem convenient, this can cause critical oversights. Trust funding requires you to coordinate complex legal and financial details that are easy to miss without professional guidance. Mistakes can lead to significant costs for your loved ones, potentially amounting to tens of thousands of dollars in probate fees.
Ensuring Your Trust Works as Intended
If you already have a living trust but are unsure if it is properly funded, it’s important to seek professional assistance. Our firm specializes in ensuring that trusts are funded correctly and in accordance with your wishes. We can help you navigate the complexities of trust funding, retitle assets, and address any potential issues before they become costly problems.
Take Action Today
Don’t let an improperly funded trust undermine your estate planning efforts. Reach out to our firm to ensure that your living trust does exactly what you intended it to do. Let us guide you through this crucial process and provide the peace of mind that comes with knowing your assets are protected and your estate plan is secure. Call today for more information and take the first step toward safeguarding your legacy.
For a comprehensive overview of the topic, check out this YouTube video that delves into the details.
