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847-367-4460
Frequently asked Questions about Funding
How does one place assets into a Revocable Living Trust?
What are the benefits of funding a Revocable Living Trust?
How does one place assets into a Revocable Living Trust?
If you create a trust, you will need to decide what property of yours
should be placed into your trust so that your trust assumes legal
control over it. Property is placed into to a trust simply by changing
its title to name the trust as its legal owner. This process of changing
title is called “funding” the trust.
Almost any type of property can be funded into a trust. The funding
process consists of simply signing documents that name the trust as the
new owner of your property. For example, some assets such as real
estate, are funded into a trust by preparing and signing a new deed that
names the trust as the new owner.
Other assets such as savings accounts, are funded into a trust by
signing a new signature card that names the trust as the new owner of
the account. Still other assets (personal property including household
furnishings, jewelry, etc.), are funded into a trust by signing a
document known as an “assignment” that names the trust as its new owner.
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What are the benefits of funding a Revocable Living Trust?
Funding a trust takes a little work, but it is well worth the effort
for one very important reason: the Trustee has legal control only over
property titled in the trust’s name. Any property not titled in the name
of the trust is never legally owned by it and property not owned by the
trust is in danger of having to be probated when its owner dies;
however, property that is properly titled in the name of the trust never
has to go through probate court because trusts never die!
If the funding process sounds confusing to you, thinking of it in
another way might help. Some have described a Revocable Living Trust as
a “magic box” in which you place all of the titles to your property. You
just open the top of the box and place in it the deed to the house, the
car, the checking account, the investment account, and anything else
desired. Since you can name yourself as the Trustee of your own trust,
you will maintain legal control over everything you put into your magic
box. At any time you want you can just reach into the box and take out
the title to any asset and do with it as you please. You can sell,
trade, invest, or give it away just as if you never had a trust. And at
your death, it is as if the magic box is automatically handed to your
designated successor trustee to administer your property according to
your instructions. All this happens without your property being
probated.
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700 Florsheim Drive, Suite 11
Libertyville, IL 60048
Phone (847)367-4460
FAX (847)367-0090
©2011 Estate & Business Law Group, P.C.