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Don't Leave Your Trust Unfunded

Posted by Joel Beck | Aug 24, 2021 | 0 Comments

We've discussed the advantages of revocable living trusts before. While (contrary to popular belief) they aren't necessary for everyone here in Georgia, RLTs may be of benefit to those who own property outside of Georgia, have blended families, concerns about asset protection for children, or privacy concerns. For those who choose a trust-based plan, there is one critical mistake to be aware of that we see far too often—failing to fund the trust.

In just the last few weeks, we have met with multiple clients who had long ago set up a trust-based plan and wanted our help in reviewing their documents. After sitting down with them to discuss their assets and looking over their plan, we realized that their trusts were completely unfunded. They had not deeded their home and other property into the name of the trust, or titled their bank and non-retirement investment accounts in the name of the trust. All their assets were held outside of the RLT that they had paid good money to create. In essence, what they had was an expensive stack of papers that did them no good.

When we explained this to our clients, they were shocked. They had not been told any of this by the attorneys who originally created their plans and thought their assets had been protected for years.

Unfortunately, this situation is all too common. If you choose to use a trust-based estate plan, you must make sure that you consult an experienced estate planning attorney who will not only create your plan but also educate you on how to fund and manage your trust and benefit from the plan you paid for.

If these clients had not come to us, and their trusts remained unfunded, upon their death the assets held outside of their trusts would still be subject to the probate process. The revocable living trusts that they had paid for with the expectation that it would streamline the distribution of their estate would prove to be worthless. This would have come as a shock to their families and perhaps led to a lengthy and expensive court process.

Thankfully, we were able to educate these clients and they are now in the process of funding their trusts and protecting their assets. However, we know there are many more folks out there in the same situation—and they might not even know it. If you have a trust-based plan in place, and you aren't sure if you've funded it properly, give Peach State Wills and Trusts a call at (678) 344-5342. If you haven't completed your planning and are considering an RLT, contact us and we will help you make the best decision for your situation.

Whether you use a Will-based or a trust-based plan, remember: estate planning doesn't have to be hard, and we can help.SM

About the Author

Joel Beck

Joel Beck founded The Beck Law Firm, LLC in 2007. His firm focused on business law and estate planning needs of clients, two areas that he was drawn to based upon personal and business experiences in his life, including a ten-year career at NASD (now known as FINRA).


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