You have taken the time to meet with an Elder Law Attorney, discussed your wishes, and created a Trust. In your Trust, you have carefully outlined how you want your assets to be distributed upon your death. That is only the beginning! Many people fail to fund their trusts. Without proper funding, a trust is just a document that will create probate and administration expenses later. This happens because most lawyers help their clients sign their documents, the clients take home their new “magic book,” and there is no follow up to insure the clients property is transferred to the trustees under the trust agreement. If this happens, your family loses the initial benefit of trusts—avoiding the cost and snail pace of probate, as well as the advantage of privacy.
The way you hold ownership to your property—that is “title” is the foundation of any estate plan whether you use a Will or a Trust. We’ve seen numerous well-intentioned plans and some very expensive plans totally fail because Title was not reviewed and/or changed to work with the plan.
Many married couples create joint accounts with right of survivorship. The contract that they create with the bank supersedes any will or trust, so that when one spouse dies, the other receives the account outright. Most investment accounts for married couples are also held as joint with rights of survivorship. Your trust will not work unless you transfer ownership of the property that you hold jointly or individually to the name of the trustee. While rights of survivorship can be easy, it creates a bad result for many families.
Another aspect of trust funding to consider are accounts and assets that pass via beneficiary designation. Life insurance, annuities, and retirement accounts are paid out according to the beneficiary designations and those designations override a Will or Trust.
Properly funding your Trust makes your trust work as intended; if left unfunded, it is likely that your well thought out estate plan for your family will fail.
If you or your loved one needs assistance titling your property, or if you have questions about government assistance programs such as Medicaid or Veteran’s Benefits, consider W.G. Alexander & Associates – we offer a unique blend of asset protection, Elder Law and estate planning. You can also attend our free seminars, learn more through our website at www.wgalaw.com, or call us at (919) 256-7000.