The Essential Guide to Funding Your Revocable Trust

In estate planning, creating a revocable trust is a critical step for many in safeguarding their future and that of their loved ones. However, the mere act of drafting a trust document does not complete the process. The vital, yet often overlooked, phase that follows is funding the trust. This process involves transferring your assets into the trust to ensure they are managed according to your wishes upon your incapacitation or death. In Pennsylvania, where estate planning laws reflect specific nuances, understanding the necessity of funding your revocable trust is paramount.

What is a Revocable Trust?

A revocable trust, also known as a living trust, is an estate planning tool that allows you to maintain control over your assets during your lifetime. It provides the flexibility to amend or revoke the trust as your circumstances or intentions change. Upon your passing, the trust becomes irrevocable, meaning no further changes can be made, and the assets are distributed to your beneficiaries as you have directed.

The Importance of Funding the Trust

1. Avoiding Probate: In Pennsylvania, assets that are not properly transferred into your revocable trust may be subject to probate. Probate is a public, court-supervised process that can be time-consuming and costly. By funding your trust, you ensure that your assets are distributed smoothly and privately, according to your wishes, without the need for probate intervention.

2. Ensuring Control and Flexibility: A properly funded revocable trust allows you to maintain control over your assets while alive and capable. You can appoint yourself as the trustee, managing the assets as if they were in your name, with the ability to use, spend, or invest these assets freely. This control extends to making amendments to the trust based on changes in your life circumstances or wishes.

3. Protecting in the Event of Incapacity: Should you become incapacitated, a funded revocable trust ensures that the person or institution you have appointed as your successor trustee can manage your assets without the need for a court-appointed guardian. This seamless transition maintains your privacy and eliminates the delay, expense, and public nature of the guardianship process.

4. Facilitating Estate Planning Goals: Whether your estate planning goals include providing for a spouse, protecting minor children, or contributing to a charitable cause, funding your revocable trust is crucial. It allows for specific, detailed instructions for asset distribution, which can include staggered distributions to beneficiaries, conditions upon inheritances, or the establishment of ongoing trusts for specific purposes.

How to Fund Your Trust

Funding your revocable trust involves transferring ownership of your assets to the trust. This can include real estate, bank accounts, investments, and personal property. Each type of asset has a specific process for transfer:

• Real Estate: Deeds must be executed, transferring the property from your personal name to the trust. Consideration must be given the type of deed utilized, which is often overlooked.

• Bank Accounts and Investments: Financial institutions require forms to change the ownership of accounts or securities to the trust.

• Personal Property: Items without titles, such as furniture or jewelry, can be transferred through a general assignment of property to the trust.

The attorneys at the Ament Law Group, P.C., stand ready to assist you in not only drafting a revocable trust that reflects your wishes but also in the crucial process of funding your trust. Ensuring your trust is properly funded is the only way to fully realize the benefits of your estate plan. Do not let your estate planning efforts go unfulfilled due to unfunded trust. Contact the Ament Law Group today to ensure your estate plan is complete and your future secure.