Skip to content
Round Logo — Smalller size
Wills, Trusts, & Estates Prof Blog
Formerly Hosted by the Law Professor Blogs Network

Estate Planning Pitfall: You Have not Properly Funded Your Revocable Trust

By Gerry W. Beyer

RevA revocable living trust compliments a will and enables your beneficiaries to receive some your wealth upon your death, with no complications. The truth is that it will not do anybody any good if the trust is not properly funded by transferring assets into it while you are alive. You must also change legal ownership of your assets from your name into the trust’s name.

If the assets are not properly the living trust will not accomplish its anticipated goal of avoiding probate. They will be governed by the instructions set forth in your will instead of the trust document. Bank accounts, securities, real estate and business interests are the types of assets to be transferred to a trust, though real estate may require extra paperwork to get accomplished. It’s often recommended that you transfer ownership of life insurance policies and annuities to the trust, but avoid transferring IRA and 401(k) plan or other retirement plan benefits to a revocable trust. This can trigger unwanted tax consequences.

See Estate Planning Pitfall: You Have not Properly Funded Your Revocable Trust, Littornolaw.com, September 19, 2018.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.

Posted in:
Current Affairs, Estate Administration, Estate Planning - Generally, Non-Probate Assets and Trusts