Q: What is a trust?

A trust is a legal agreement involving three people: the creator of the trust, the trustee, and the beneficiary.

Q: Who can be named a trustee?

Technically anyone can serve as a trustee; however, it is generally advisable to name an independent third party as a trustee.

Q: What is the importance of funding a trust?

Trust funding is a process by which your assets are titled out of your individual name and into the name of your trust during your lifetime. This process is vitally important because any asset(s) that are not funded into your trust will have to go through probate, thus negating any probate avoidance planning you had previously done. Not only will assets left outside of your trust not be controlled by the trustee, they also won’t be controlled by the terms of the trust. This will severely hamper the trustee’s ability to manage those assets as you had planned.

Q: What if my assets change after my trust is created?

Yet another important piece of funding is keeping your living trust records current and up-to-date as to what the trust owns. This will change as you buy new assets and sell, give away, trade, or discard old ones. If you keep your records current, you will greatly assist your loved ones and successor trustees in understanding what your living trust controls upon your disability or death. Poorly kept or nonexistent records as to what your living trust owns will significantly hamper the ability of your living trust to fully avoid the probate process and dramatically reduce the time and cost to settle an estate.