Asian Journal- The Filipino-American Community Newspaper

AFTER long planning and excessive delays, you finally did your living trust! You think your assets and loved ones are safe and protected from the dreadful process of probate.

Absolutely not at this point! Not until you have funded the trust.

The trust must be funded: assets must be transferred in the name of the trust. This is a very important step that, most often than not, gets neglected.

Funding your revocable living trust with bank and investment accounts, stocks, business interests and real estate and updating the beneficiaries of your life insurance and retirement accounts are the next crucial steps. In fact, funding is just as important as setting it up. But why?

There are two main benefits of using a revocable living trust as the foundation of your estate plan: (1) Having a disability plan in your trust will allow your family to avoid guardianship and conservatorship if you become disabled; and (2) Assets titled in the name of your trust at the time of your death will allow your family to avoid probate after you die.

Thus, if any of your assets haven’t been funded into your trust and your beneficiary designations haven’t been updated, then upon your disability or death your revocable living trust will be completely useless.

The key is to get your assets into the trust and the beneficiaries updated while you’re alive and well - this is the only way to insure that the disability trustees you’ve named in the trust can manage, invest and spend your assets for your benefit if you become disabled, and the administrative trustees you’ve named in the trust can manage, invest and distribute your assets for the benefit of your beneficiaries after you die.

Think of your living trust as a bucket that holds title to your real estate and money accounts. The trust language identifies who is to manage your assets and what they are to do if you become incapacitated, and also who is to receive your assets after you’re gone.