What is “funding” the trust?
For a living trust to take effect, title to the grantor’s assets must be transferred into the trust. For example, title to any bank accounts, stock certificates or real estate owned by the grantor must be transferred into the trust. The grantor must take active steps to transfer assets and fund the trust, and just executing the living trust itself will not cause the trust to become funded.
For a living trust to take effect, title to specific, individual assets must be transferred into the trust. Examples are: bank accounts, stock certificates and real estate. Contrary to what many living trust salespeople may imply, you must take affirmative steps to actually transfer your individual assets and fund the trust. This doesn’t happen automatically by just drafting the living trust document. DOES A LIVING TRUST AVOID PROBATE? It is true that you can avoid probate using a living trust, BUT REMEMBER, most people don’t need a living trust in the first place and there are expenses associated with establishing and maintaining one. Pennsylvania residents should not be concerned with the cost of probate fees. In Erie, Pennsylvania, probate fees for an estate of $1,000,000.00 are $250. DO THOSE WITH LIVING TRUSTS STILL NEED A WILL? Yes. Your Will handles any assets which were not transferred into your living trust. This Will is called a “pour over” Will because it provides that asset
For a living trust to take effect, title to the grantor’s assets must be transferred into the trust. For example, title to any bank accounts, stock certificates or real estate owned by the grantor must be transferred into the trust. Contrary to the impression created by many living trust salespeople, the grantor must take affirmative steps to transfer assets and fund the trust. Merely executing the living trust itself will not cause the trust to become funded. DOES A LIVING TRUST AVOID PROBATE? Perhaps the biggest advantage of a living trust is that it does not have to go through probate, as does a will. However, there are other estate planning devices which avoid probate, such as a joint tenancy, a life insurance policy, and in-trust-for bank account (also known as a Totten Trust), and individual retirement, pension or Keogh accounts. In addition, living trust salespeople often overstate the cost of probate and the length of time it takes to probate a simple will. WHAT IS A “POUR-OVER
For a living trust to take effect, title to the grantor’s assets must be transferred into the trust. For example, title to any bank accounts, stock certificates or real estate owned by the grantor must be transferred into the trust. Contrary to the impression created by many living trust salespeople, the grantor must take affirmative steps to transfer assets and fund the trust. Merely executing the living trust itself will not cause the trust to become funded. DOES A LIVING TRUST AVOID PROBATE? Perhaps the biggest advantage of a living trust is that it does not have to go through probate, as does a will. However, there are other estate planning devices which avoid probate, such as a joint tenancy, a life insurance policy, and right of survivorship for a bank account , and individual retirement, pension or Keogh accounts. In addition, living trust salespeople often overstate the cost of probate and the length of time it takes to probate a simple will. WHAT IS A “POUR_OVER” WILL? A “pour
For a living trust to take effect, title to the grantor’s assets must be transferred into the trust. For example, title to any bank accounts, stock certificates or real estate owned by the grantor must be transferred into the trust. Contrary to the impression created by many living trust salespeople, the grantor must take affirmative steps to transfer assets and fund the trust. Merely executing the living trust itself will not cause the trust to become funded. Back to top.
