Continuing with the estate planning theme, people often work with an attorney to form a trust as part of their estate plan. However, many also fail to recognize the importance of funding the trust.
Funding the trust simply means making decisions about what you would like to place into it and who should manage the trust should you become unable to do so; you can also decide how the assets within the trust should be distributed in the event of your death.
If a trust is formed but not funded and distribution decisions made, then the probate court will decide how to distribute your estate’s assets. Since the court must become involved in settling an estate such as this, there is a cost – which is often more than one might think!
When a person dies, surviving family members do not always agree on how assets should be allocated or on what should happen with any real estate or personal property that might be part of the estate. An estate plan with a funded trust provides a good way to circumvent disagreements while combining estate planning goals with the avoidance of probate.