Funding a trust refers to the process of transferring legal ownership of assets into a trust. This is a crucial step in establishing a trust, as it ensures that the assets will be managed according to the terms specified in the trust document and will ultimately benefit the designated beneficiaries.
There are various types of assets that can be funded into a trust, including real estate, bank accounts, investments, personal property, and business interests. The process typically involves changing the title or ownership of these assets from the individual to the trust. For example, if a person wants to fund their revocable living trust with their home, they would execute a deed transferring ownership of the home from themselves to the trust.
Each type of asset may have its own specific requirements for funding. For instance, real estate usually requires a formal deed, while bank accounts may require completing a new account application in the name of the trust. It’s important to ensure all intended assets are funded into the trust to achieve the desired estate planning goals, such as avoiding probate or ensuring privacy and control over asset distribution.
In the context of Houston or surrounding areas in Texas, it is essential to comply with local laws and regulations when funding a trust, particularly for real estate transactions, which may involve specific title and registration requirements. Consulting with a qualified estate planning attorney can help ensure that the funding process is executed correctly.
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