Living Trusts must be funded during your lifetime while Testamentary Trusts are funded after your death. To determine the best way to fund your Trust, it’s a good idea to speak to an estate attorney who can take into account your financial situation and the goals you want to achieve.
Funding A Revocable Living Trust
If you are setting up one of these you will likely be the sole Trustee. As the sole Trustee, you can move assets in and out of the Trust at will without too much hassle. Many people with Revocable Living Trusts put a large portion of their assets in it, including real estate, financial accounts (stocks, bonds, etc.), and even bank accounts.
[To learn see our article about Revocable Trusts.]
Funding An Irrevocable Living Trust
By putting assets into an Irrevocable Trust, you are essentially giving up ownership and control of those assets, so you should choose them carefully. Choosing a funding method that supports the goals of the Trust is something you should decide with the help of an estate attorney. Transferring property to an Irrevocable Trust also requires you to complete a formal transfer or property, resulting in the property being re-titled in the Trustee’s name. An attorney can help you complete and manage a re-titling of property.
[To learn more see our article about Irrevocable Trusts.]
Funding A Testamentary Trust
Testamentary Trusts are funded only after your death with the assets of the your estate. In order to fund one language in the Will must explicitly state that all assets should be moved into the Trust upon your death. The estate assets can then be distributed and managed according to the terms of the Trust.
[To learn more see our article about Testamentary Trusts.]