What Does Funding A Trust Mean?
“Funding a trust” is the term used to describe the ownership transfer of assets from your name into the name of your trust. This is perhaps one of the most important tasks that should be accomplished for an individual or a family that wishes to avoid probate. The assets held in an individual’s name will generally be subject to probate proceedings and the associated cost of those proceedings, but the assets that belong to a trust typically are not subject to any probate proceedings. In some cases, funding a trust requires the filing of a new deed. In Oklahoma, the transfer of real property is completed once you file a deed to transfer ownership of real estate or mineral rights into the name of a trust. Transferring ownership of a bank account is completed by taking the appropriate trust documents to your bank and advising your banker that you have created a trust and would like your bank accounts to be held in the name of your trust.
Transfer of items with titles such as recreational vehicles, boats, automobiles, trucks and the like are accomplished by a trip to the local TAG office with your title and the appropriate trust documents. The TAG office will make copies of these trust documents and will assist you in endorsing the title to your trust. The officer will then issue a new title in the name of the trust. There is a modest cost associated with the transfer of the title in the name of the trust.
Who Is Ultimately Responsible For Funding a Trust?
As the trustor (person creating the trust), you get to decide who will do the trust funding, but generally speaking you must be closely involved in funding the trust, However, there are some options if the trustor does not wish to do all of the work alone. For example, my office will often assist clients with funding real estate in the name of a trust. We do this because we are extremely familiar with the actions necessary to get a deed correctly funded into a trust and well acquainted with the locations of the appropriate offices for filing the deeds. Other law offices may leave this work entirely to the trustor. There are also commercial enterprises that specialize in funding trusts. They can help to prepare documents, they can contact financial institutions and they can give much practical advice, but they can be rather expensive.
Many of my clients choose not to pay the cost associated with these commercial enterprises and they are able to accomplish their trust funding on their own. But at the end of the equation, you, the trustor, must be absolutely confident that you have successfully transferred title of all of your assets into the name of your trust. You are the only one who has complete knowledge of your assets and accounts and therefore you should trust your own personal review alone, in assuring that all of your accounts have indeed been transferred.
What Happens If a Trust Is Not Funded?
A trust can only control the assets that it owns. Therefore, many trusts that are not funded have no effect at all….other than to drain your pocketbook. You have spent good money, time and effort to create this trust and it is possible that your money, time and effort will all be lost if you do not properly fund your trust.
Our office recently finished a probate where the deceased person had a family member create his trust. Unfortunately, the family member did not successfully fund the trust or create a pour-over will (a will that directs the court to put all unfunded assets into the decedent’s trust). Therefore, the trust has no effect and the deceased person’s assets went to a relative with whom he had no personal relationship. In fact, this relative had rejected the decedent many years ago and had completely ignored his existence. But given that the trust was not funded, the State laws of intestate succession were applied and the intended beneficiaries did not receive their inheritance.
For more information on Funding A Trust In Oklahoma, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (405) 754-4166 today.
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