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Funding is the important second step in creating a trust

As this blog has discussed previously, many Fresno residents will at some point consider creating a living trust as they start to think about financial and estate planning. Although not for everyone, there are many good reasons a person might set up a revocable living trust as a means of passing down their legacy to loved ones and others, perhaps the most attractive reason being that it can keep an estate out of a lengthy probate process.

Creating the trust itself is the first step, and that involves preparing a detailed trust document that covers all legal bases and accounts for any contingencies in one's plan. Usually, Fresno residents will go to an estate planning attorney for help with preparing these documents and to make sure they are legal and will accomplish the person's goals.

However, there is a very important second step Californians must not overlook when establishing these trusts and that is funding the trust. By way of explanation, a trust, when created, is a separate legal entity that has the right to hold property and conduct business. However, unless the trust receives title to property, usually from the creator of the trust, it is just a legal creation with no real power to accomplish anything.

Therefore, after creating a trust, residents should work with their attorneys to make sure all of the property they want in to the trust is properly transferred in to the trust so the trust is properly funded. This may involve deeding a piece of real estate to the trust or other steps.

Likewise, the ones creating the trust will want to be sure they have changed the beneficiary designation on stocks, insurance policies and other accounts if that is their desire. They also may want to create a simple will, called a pour-over will to cover any property that happens to be outside of the trust at the time the person dies.

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Law Office of Jeffrey B. Pape, P.C.
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