You have met with an attorney, your living trust was created, and you have signed the documents. So you are feeling pretty good about being able to check this one off your family legacy drawer checklist.  But wait, there is one more crucial step to this process!   Have you formally transferred the title of your assets to your living trust?

This process is called “funding the trust”. To do this, you would physically change the titles of your assets from your individual name (or joint names, if married) to the name of your trust.  Funding your trust changes the title of the asset, but you as the trustee will still have complete control.  It very common for people to skip this important step.  Many people assume that the attorney who drafted the trust document would also take care of the funding.  But that is not necessarily the case, so be sure to check with your attorney to be clear about who is responsible.

Most attorneys will transfer your real estate and provide instructions for your other assets. But please note, you are ultimately responsible for making sure your assets are transferred to your trust.

Funding your trust is not difficult, but it will take some time. Most institutions have their own forms and some will require written instructions from you.  Some will want to see proof that your trust exists.  Your attorney most likely prepared a “Certificate of Trust” that verifies the existence of your trust.

So while the funding process isn’t difficult, it is easy to get sidetracked or procrastinate. It is important to make funding a priority and keep at it until it is finished. Make a list of your assets, their values, and locations.  Check off each one as the funding process is complete.

You may own valuable assets that do not have official title documents. For example, you may have artwork, collections, or heirlooms that you want to have held in the trust.  Depending upon the laws in your state, you can do this by listing the items as an attachment to the trust document or creating a document called an assignment of property.

The primary reason people create living trusts is to avoid probate. However, if you fail to “fund the trust” by changing the titles, you will probably not avoid probate.

Along with your trust document, your attorney will prepare a “pour over will”. This acts as a safety net to catch any assets forgotten and sends it to the trust.  The asset will most likely go through probate first, but then can be distributed according to the trust instructions. The probate process is expensive and time-consuming and this is why funding your trust is so important.

Please note that I am not an attorney and the information above does not constitute legal advice. The laws are different in each state and your trust may have specific provisions.  Contact your attorney with specific questions on funding your trust.

Funding your trust is the crucial, final step of the living trust process. Do it now!