Why Do We Need to Fund a Trust? (Video)

admin • March 25, 2024

Carlsbad trust attorney Andrew Fesler discusses why you need to fund a trust. As a leading attorney in Carlsbad, California, he specializes in estate administration and probate, trust administration, advance directives, business succession planning, and all aspects of estate planning. To learn more about how to fund a trust contact our office, The Law Office of Andrew Fesler, at (760) 444-0943.

Transcript:

Because a trust is an entity unto itself that the client is creating, the trust needs to actually own all of the assets that the client wants it to transfer to their beneficiaries. Otherwise, we haven’t really accomplished anything. We can go through 90% of the trust planning and execution process and get all the way to signing the documents and, if we get a signed, completed document but we haven’t funded it, we’ve actually accomplished almost nothing. We have essentially done what would’ve been done if somebody had just created a will.

We’re going to go to probate. We’re going to have to spend a long time getting those assets through the probate process and then finally transferred into the trust. If we don’t execute a deed and have the deed recorded to transfer the client’s real estate into the trust, those assts aren’t going to pass through the trust, and they’re going to have to go through probate. If the client doesn’t go to their bank or banks or brokerage institutions and get their accounts transferred in the name of their trust, then they’re not going to have those accounts pass through the trust either.

This comes up a lot I see when clients go to, say, online drafting services and have a trust drafted and sign it. The trust may even be a document that functions, but the client then doesn’t understand how important it is to do the last step and get the document funded. The trust actually winds up accomplishing almost nothing, so I think that’s also a really important reason that going to an attorney to have the trust process put into place is really important compared to having a client, say, go online and do it on their own.

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