Funding a Living Trust in Phoenix & Scottsdale - palm holding stack of dollar bills and stacks of coins

Funding a Living Trust in Phoenix & Scottsdale AZ

You’ve begun taking steps toward planning your estate. And rather than creating a will, you’ve decided to establish a trust fund, which, if funded properly, will enable your assets to be privately distributed to your loved ones without the delay or expense of probate court. But what does it mean to properly fund a trust fund? At Phelps LaClair (with offices in Phoenix, Chandler, Scottsdale and Mesa, Arizona), we’re well acquainted with the laws and requirements of funding a Living Trust. We do every aspect of estate planning, and we’ve been doing it for several generations. And funding your trust is a crucial step in the process of properly setting up your Living Trust in Phoenix, AZ.

Funding a Living Trust in Phoenix & Scottsdale, Defined

Basically, to fund your Revocable Living Trust (RLT) means you’re taking any assets currently listed in your name (or jointly named with another person), and transferring the titles of those assets to the trust. In addition, the process will include changing most or all of the beneficiary designations of those assets to name the RLT as the primary or secondary beneficiary of those assets.

Here’s why funding your trust is so important:

Part of creating your Living Trust involves naming a trustee (or trustees) to manage and control your estate after you’ve passed away, or in the event of your incapacitation. But that trustee won’t be able to touch any asset that has not been retitled and/or transferred to the estate. In short, the assets that have not been transferred into the trust will most likely end up in probate. And that means tying up your assets in court proceedings and costing additional expense to your heirs.

Funding your trust takes time. But it’s the only way to see that your Living Trust functions as it was intended to function. A Living Trust that hasn’t been funded is essentially a pile of papers with no legal authority.

Considerations for Funding Your Trust

There are aspects of funding you’ll need to discuss with someone who understands the legalities of funding a trust. For example, do you want to put your car in your trust? If your car is valuable, transfer may be a good idea, but if you’re in an accident while you’re the still the trustee and your trust is the owner of your car, now the trust has become vulnerable to lawsuit by others who were in the accident.

This is a partial list of assets you’ll need to discuss with a lawyer regarding their possible transfer to a Living Trust:

    • Real estate. This may include your home, a secondary home(s), rental properties, and any property you may own in another state. Also, any property where you hold a partial interest
    • Cash Accounts, including, but not limited to, checking and savings accounts Certificates of Deposit, as well as Money Market Accounts (the amount of your cash accounts will determine how they should be handled)
    • Stocks and Bonds.
    • Property you own in part, or in full. In addition to your real estate property, other tangible property to consider re-titling may include your car, a boat, antiques, valuable works of art, jewelry, collectibles, etc.

    For transfer of IRA retirement accounts, pensions, or even life insurance policies, there are taxation factors that will need to be examined before taking action, all of which should be done with the help of an estate planning lawyer.

    You can understand why it’s wise to involve a qualified professional in the process of funding your estate. The complexities of setting up your trust are easily done with those who are well equipped to walk you through the process. That’s where Phelps LaClair comes into the picture. Having set up Living Trusts for many families in the Phoenix Valley, we’re ready and able to walk with you through the process of funding a Living Trust. We want to make your job easy for you, and we want to make sure all your bases are covered. If you’d like to discuss your Living Trust needs, please give us a call, or contact us through our website.

    Images used under creative commons license – commercial use (5/14/2018) pictures of money (Flickr)

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