Oftentimes people will come to our offices to update their estate plan and tell us they currently have a trust. More times than not we discover that all these clients have is a trust document…not actually a funded trust at all. So, what is a trust and what does it even mean to fund it? A trust is just a relationship. The trust document establishes whom that trust relationship is between (the “Grantor” or “Settlor” and the “Trustee”) and the rules the Trustee must follow when administering the trust assets (the trust terms). In addition to the trust document itself however, assets, whether it be real property, bank accounts, or other kinds of personal property must actually be conveyed to the trust in order for the assets to be governed by the Trustee and the trust terms. If a client thinks they have their house in a trust but in actuality it is still in the individual’s names, the Trustee has no power over the house, despite a trust document referencing the house. There has to be a deed conveying the house to the trust for the Trustee to govern. Knowing what you have is critical to knowing how to proceed in many contexts, including long term care planning and probate.
This article is written by an attorney at Wyatt & Mirabella, PC. Always consult an attorney before making any legal decisions. To make an appointment today for a free consultation, please click here to contact us.