Funding A Living Trust Made EasySome people do not understand the exact process that goes into funding a living trust. They are under the mistaken impression that a check is written, and then you are done. This is actually wrong; the process of funding a living trust is much more complex than just writing a single check. In addition, just creating the paperwork for a living trust does not actually handle the funding either. You must take actual steps to legally fund the trust in order for it to be effective. What does this mean exactly? For example, you cannot simply fill out the paperwork for the living trust, and then consider it fully operational and funded. This is grossly inaccurate and will result in further complications. Aside from the paperwork being necessary in order to follow the grantor's wishes, the property must actually be transferred to the trust in order to fund the trust. What this means is that if you wish to move a bank account to your living trust, you must contact your bank and determine exactly what their procedures for handling this are. Typically, most banks require a written letter from the account holder, giving them detailed specific information about the name of the trust, the date it goes into effect, and the account number of the account in question. Some banks may even require proof of identification to ensure that the person transferring the account to the trust has the authority to do so, which helps prevent identity theft and fraud. In order to property to be transferring to the trust, you must work with a title company to draw a new title, or deed. If you have used a lawyer to set up your living trust, then funding the living trust becomes their job, and they just let you know what they need from you in order to move the necessary accounts and property to the trust. You must ensure that all property is transferred properly. While the bank may accept merely a written letter from you, do not assume that just because it was mailed, that the account was actually transferred. You must follow up for all accounts and properties being used for funding a living trust in order to assure they are actually transferred as specified. Many times, banks especially will have a procedure for handling these issues that can take a while, you want to ensure the process is completed, and know exactly what the expected date of completion is so you can check back and verify that it was actually done. If you are transferring large amounts of bank accounts, a lawyer may be able to assist you in drafting a generic letter that will suffice for all accounts, and you will only have to fill in the separate account number for each account to be transferred, rather than rewriting the letter each time. Also, remember, the mail system is not perfect. Never assume because a letter was mailed that it actually reached the intended destination. Approximately a week after the letter is mailed, call, or visit the bank location to follow up and see if any additional paperwork is necessary. This can help avoid problems with funding a living trust when the mail is lost, and unsuspecting grantors assume that all matters are resolved. While the process may seem very complicated to many, it is not complicated at all. It takes time to handle properly fund a living trust, and it is well worth the effort to make sure it is done right. By ensuring everything is handled properly you can rest assured, your wishes will be followed, and you can guarantee that you will be protected from mistakes. |