On behalf of Chandler and Brown, Ltd. posted in estate planning on Thursday, September 14, 2017.
There are so many different kinds of trusts available to people in St. Paul, that it may seem like there is a trust out there to meet every person’s needs. These trusts can name beneficiaries, whether it is a person’s loved one or a favorite charity, and are meant to distribute a person’s assets to their beneficiaries. However, are those trusts always effective? For a trust to do what a person wants it to do, there must be funds in it. An unfunded trust is like an empty box — you may have the vessel, but there’s nothing in it to give away once you die.
Sometimes, a person’s trust will be funded upon the happening of a particular event. For example, some people might have a trust and a pour-over will. Once the person dies, their probate assets will “pour” into the trust (although this means that, despite the trust, the assets will still go through probate). Or, in an Irrevocable Life Insurance Trust, the life insurance policy has language that funds will only be distributed to the trust once the policyholder passes away and the proceeds of the life insurance policy are doled out.
In the end, it may be wise then to fund that trust while you are still alive. Assets that remain outside the trust are beyond the trust’s control, so make sure the trust is funded with all the assets you want it to contain. To fund a trust, a person may need to seek the help of a professional, but it is not anything that should be too onerous. If the person who owns the trust becomes incapacitated before funding the trust, then that person’s power of attorney can fund it.
Deciding to create a trust is an important part of estate planning, but you must do more than just create the vessel — you must fill it. Estate planning attorneys can advise on this topic, so their clients can make informed decisions.