What is the difference between a funded and unfunded trust?
Having received your living trust documents, your living trust will not take effect until you execute it by signing all of the necessary papers and obtaining witness signatures and a notary. However, even then your trust will remain “unfunded” until you transfer your assets into it. Transferring your assets into your trust is quite simple. For example, with a deed, you can transfer your real property from your current ownership to your trust. The law does not consider such a transfer to be a sale for the purposes of reassessing your property for tax purposes. In addition, you may contact your bank or other institution where you hold assets to rename your assets and accounts as belonging to your trust. We will assist you in this regard. After your assets are transferred to Your trust, your trust is considered “funded”.
Once you have decided on a trust and having received your living trust documents, your living trust will remain “unfunded” until you transfer your assets into it. Transferring your assets into your trust is quite simple. For example, with a deed, you can transfer your real property from your current ownership to your trust. In addition, you may contact your bank or other institution where you hold assets to rename (or retitle) your assets and accounts as belonging to your trust. At BARLAY | WEBSTER to ensure that all of our trusts are created, we always schedule a follow-up meeting with each client to check on the funding status. If the client does not wish to fund the trust, our staff may also be able to fund the trust.
