Setting up a trust allows your property and assets to avoid probate and for your intended beneficiaries, such as children or other relatives you may designate, to receive the inheritance you intend. However, your California estate plans might not turn out the way you want if you neglect to fund your trust. While establishing a trust is an important step, it is not the final step in the process.
Forbes explains that after a trust agreement is composed and signed, the next step is to transfer assets and property into the trust. Even if trust documents state that the trust contains a certain amount of money, the trust is actually empty unless you designate that the trust is the owner of whatever you want the trust to contain. Otherwise, when it comes time for your heirs to inherit your assets, the trust will have nothing to give them.
Sometimes transferring property is simple. You might want the trust to contain ordinary household items, like furniture or electronics. Other assets may be more complicated to transfer. For instance, if you plan to include real estate in a trust, the deed of the property should be changed so that the trust is the owner. If you want to transfer a bank account to a trust, you might have to open a whole new account presided over by the trustee and transfer the assets to it.
These are just a few examples of what you may need to do to fund a trust. The good news is that these steps are not particularly difficult, nor should they cost you a lot of money. However, some trust creators forget to carry out ownership transfers to a trust, which can be a big problem when the trust creator dies. The assets are not considered part of the trust and end up going through probate in spite of what the trust creator had wished.
CNBC points out that, to further ensure no assets are missed if you want them in a trust, you may create a pour over will that states your remaining assets are to be transferred to a trust. By doing so, these assets should avoid probate along with whichever assets are under the jurisdiction of the trust. You might also consider asking an estate attorney for additional ways you can fund a trust or help ensure your assets are taken care of.