A Trust is a very powerful tool used to maintain control of your assets during your lifetime and throughout incapacity or even death. One of the main reasons many families opt to complete Trust planning is to prevent their estate from going through probate court. To do this, a Trust must be properly drafted and “funded.”
Funding a Trust means transferring ownership and/or title of your assets to the Trust. The idea is to tie your assets to the Trust so that their maintenance and distribution are governed by the provisions of Trust. Your Trustee, whether you have named yourself or another, maintains and manages these assets according to the Trust terms.
Your Trust and its provisions can only control the assets that have been tied to it. This means that if you have a Trust that has not been properly funded, your estate will not avoid probate, and your loved ones will find themselves in probate court to administer the Trust.
There are different ways of tying an asset to your Trust, and the manner in which you do this may depend on the type of asset at issue. Some assets must be retitled so that the Trust becomes the owner of that asset. Sometimes, retitling an asset is not an option. In that case, the Trust may be added as a beneficiary of an asset so that the value of that asset transitions into the Trust after the owner’s death. In addition, when dealing with real estate that you hold title to, like your home, you may need to execute a deed that ties the home to your Trust. Such a deed must also be recorded with the county’s Register of Deeds office.
Funding a Trust is not necessarily difficult to do, but it does take some discussion, planning and strategy. It is best to discuss with your attorney which assets should be tied to your Trust and how this funding should be accomplished. Be sure to let your attorney know about all the assets and real property that you own so that the correct planning can be done and your Trust is completely and properly funded.
Building a relationship with a trusted Michigan Estate Planning attorney is the first step towards achieving your estate planning goals and gaining the peace of mind that your planning has been properly done. Need help getting started? Consult with a Michigan estate planning lawyer today.