There is a common term used in estate planning, though it may not be very common elsewhere. The term is “funding.” I’d like to speak briefly about what it means, why it is critical, and how we help you with it. After all, if you have a trust and you’re not sure if it is funded or not, your heirs might be the ones paying the price when you pass away.
Funding is the term used to describe putting assets into a trust. If you picture a trust as a box, funding the trust is like putting all sorts of objects into the box. With a trust, putting objects into the box means changing the title on the assets to the trust. Once the objects are all inside the box, or the trust in this case, it is then funded.
So why is funding so important? Imagine you build a beautiful new house, carefully making sure every inch is just the way you want it, and then you never live in it. Imagine you spend a whole afternoon baking a delicious dessert, but never taste it, buying the car of your dreams, and then never letting it leave the garage. This is what it is like if your trust is never funded; there is little purpose to the trust if it is not funded. Just like a house is designed to be occupied, desserts are made to be eaten, and cars are meant to be driven, a trust is meant to be funded.
A trust gives directions on what to do with the assets inside it. So if there are no assets inside the trust, other rules come into play, which sometimes means going to Court and allowing a Judge to make decisions on what to do with the assets. Would you like someone else telling you how to live in your own home, or when you can drive your own car? Of course not! [KFK1] The whole point of having a trust is so that you make the rules and that your estate (and family) stay out of the courtroom. This is why funding is so critical!
Not only is our law firm is devoted to helping our clients create trusts that meet their needs, but we also help our clients fund their trusts so a court or judge can’t say what should happen with their assets. Funding a trust is so important we prepare letters that tell financial institutions exactly how to transfer your assets to your trust.
Because, after all, dessert is so much better when you are the one who gets to enjoy it.
Why Choose Morris Hall:
You have a number of options when it comes to estate planning, so why pick Morris Hall? First off, estate planning and asset protection are a very complicated endeavor and you should only trust someone who focuses exclusively on those matters. Also, MH is a proud member of The American Academy of Estate Planning Attorneys (AAEPA) which provides us additional support, advanced training, tools and information that is not available to others – which means that we can better protect your assets and your loved ones. We are one of only two firms in Arizona that belong to the AAEPA and are the only firm in that has been granted membership. If you have assets and loved ones that you want to protect, you are in good hands with MH. Contact us today at 888.222.1328 to schedule an appointment!
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.
- What Happens If Someone Passed Away without a Will or Trust? - December 1, 2022
- What the Proposed Treasury Regulations Mean for Deductions Under Internal Revenue Code Section 2053 - September 16, 2022
- Does Your Estate Have Sufficient Liquidity? - September 14, 2022