Once you craft your estate plan and your living trust documents are drafted and signed, the work is not complete -- it's just beginning!  To ensure that your estate plan works as designed, your living trust must be accurately "funded."  "Trust funding" is the process of  transferring your assets to your trust when you establish it and then maintaining that funding during your lifetime.  Unfortunately, trust funding is not a subject you've probably heard a lot about.  In fact, most trust clients don't fully understand what trust funding is, much less why it's so risky to leave your living trust unfunded or to attempt it without the professional guidance of your attorney.   Many clients may find it confusing that when you sign your trust, that's just the first step in proper estate planning.

An unfunded trust is like a car with an empty gas tank: neither will get you where you need to go!  While trust funding is a critical aspect of successful estate plans, it's also also one of the least accomplished tasks.  Why?  Because trust funding is among the most complex and challenging responsibilities associated with estate planning.  As important as trust funding is to clients and the success of their estate plans, it's surprising more attorneys don't help them with it.  Fortunately, this trend is improving, with many more estate planning attorneys establishing full service firms complete with trust funding and trust settlement services.

Yet more attention needs to be focused on the general lack of adequate trust funding.  Many trusts are only funded partially with some of the clients' assets.  Too frequently, there are trusts that are never funded at all.  Several factors contribute to this problem.  Clients often lack the time to manage their own trust funding.  Most do not possess the legal expertise required to fund a living trust accurately and completely.  Some simply forget to fund their trusts as they should or think they will just get around to it someday.  To make matters worse, many attorneys don't fully emphasize the importance of trust funding in the success of the estate plan.  Clients just don't understand how important it is.  And too few attorneys offer their clients professional assistance in funding their trusts after the  trust documents have been signed. 

Deficiencies in trust funding and overall plan maintenance are far to common, often resulting in estate plans not working they way that they are intended and the way that the clients expect.  In short, most clients are surprised to discover that a lack of complete and proper funding can derail the very estate plan that they rely on.  It seems like a strange paradox but it's true.  Because of shortcomings in the trust funding process, most trusts fail to achieve the very goals they were drafted to accomplish.  The good news is - it doesn't have to be this way!

Living trusts offer many of the best estate planning approaches available.  These trust plans are important to the well being of you and your loved ones.  Living trusts can be very successful in achieving your objectives.  Trust plans should not be neglected because they seem onerous or complex.  Rather, the estate planning process needs to be reasonably managed and maintained like other types of planning.  Most living trust clients understand this inherent reality.  Like sound financial or tax planning, it just makes sense to take care of the trust by funding it properly and updating it with time.  Informed clients recognize that successful estate planning is more than believing things are taken care of just because they signed legal documents.

When attorneys properly explain the role of trust funding to clients (along with the risks of not doing it!), clients readily embrace the trust funding and plan maintenance approach.  Most clients are willing to dedicate themselves to the work that successful estate plans requires. Clients who are devoted to the well-being of their loved ones to perform proper estate planning demonstrate a strong commitment to plan maintenance also.  In fact, most clients readily embrace it over the alternative!

Establishing a long-term partnership with your estate planning attorney is key.  Because the legal complexities of trust funding impact greatly on the success of your estate plan, you should be realistic in your expectations of the trust funding process and seek professional guidance.  Many attorneys now offer trust funding services as part of their full service estate planning firms.  If your attorney does not offer these services or has not fully explained the importance of trust funding to you, please consult our Attorney Directory listing, identifying estate planning professionals who offer such important services. 

There is no short cut or magic bullet for good trust planning.  Funding your trust is sufficiently complicated and fraught with risk if not done properly.  It can be laborious and cumbersome to coordinate, which is why experienced attorneys are best positioned to help.  Trust funding needs to be tailored to the unique circumstances of each client, each family, and each estate.  No one trust funding strategy is right for every client or every estate plan.  More importantly, no one trust funding strategy is appropriate for every asset type or every legal jurisdiction.  Each type of asset — whether real estate, retirement plan, life insurance, or bank accounts — has its own trust funding considerations unique to the characteristics of asset itself.  The more education you have, the better the trust funding process will proceed.  Without knowledge, it is possible to commit a grave error inadvertently that undermines the plan itself or that creates unwanted tax or legal consequences.  In short, trust funding is not for the uniformed.

The good news is that, with some preparation and the guidance of a caring and conscientious attorney, your trust can be funded skillfully.  Talented estate planning attorneys around the country manage and fund thousands of trusts with a high degree of accuracy and success.  Moreover, the work you invest in lifetime management of your estate plan pays big dividends to you and your loved ones.  The post-mortem administration of your trust after death should cost substantially less, flow more smoothly, and achieve your planning goals successfully.

To neglect funding your living trust or to fund it haphazardly will in most circumstances ensure the failure of your estate plan to meet its goals and increase the overall cost of your planning -- no matter expensive or inexpensive your trust was, no matter how simple or complex it is.  We can help estate planning attorneys and their clients fund and maintain their estate plans during the lifetime.  We have designed professional trust funding and trust settlement systems used by hundreds of estate planning attorneys throughout the country.  Our systems help full service firms establish and facilitate these activities with success.  We can help you become more informed about the intricacies of trust funding and avoid pitfalls that can undermine the success of your plan.  Beyond that, we can help identify skilled attorneys with experience in trust funding and estate plan maintenance, if you discover you need guidance or lack the time and expertise. 

Remember that neither estate planning nor trust funding are one-time events; your estate planning should be maintained over the course of your lifetime if you expect to achieve the goals you established for the well being of you and your loved ones.  That means not just funding your assets today, but also transferring newly acquired assets as your financial situation changes with time.  An estate plan maintenance program can manage these important trust funding matters as part of an overall approach to ongoing review and updating.  Best of all, clients who participate in trust funding and estate plan maintenance activities report exceptional satisfaction with their estate planning process and great peace of mind.  Please contact us if we can be of help!