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Estate Planning Boot Camp: Lesson 3 - Funding Trusts: Is There Fuel in the car?

Updated: Feb 4


A coherent strategy for the transfer of assets is, of course, crucial to the success of any estate plan. But our best-laid plans will fall far short of expectations if the trusts we've so carefully drafted are never properly funded. If the trust is the car, the funding is the fuel. Without gas in the tank, that beautiful sedan with the precision engine is just metal on four wheels. It’s not going anywhere. The same holds true for an estate plan . Until it’s properly funded, the “plan” is just a plan – a plan that can’t be executed. Like the car with the needle on empty, it’s not going to take you anywhere.

With basic wills, most of the funding happens after death through the probate process. By contrast, a trust can – and really should – be funded while the trust maker is still alive. With proper trust funding, we have assurance that our client’s designated assets will be governed by the terms of the trust agreement. Without it, assets not properly transferred to the trust will generally fall to probate.

Proper trust funding involves moving assets that are in the client’s name and retitling/reassigning them to the trust. These assets fall under three main categories:

  1. Personal property and real property with title (home, car, boat, etc.)

  2. Non-titled property (computer, furniture, artwork, tools, etc.)

  3. Property that passes by beneficiary designation (life insurance, 401(k), etc.)

In certain instances such as incapacity, the General Durable Power of Attorney can be useful in funding a trust. This ancillary document allows the agent acting under Power of Attorney to transfer assets or update beneficiary designations. Additionally, where property remains in the individual’s name at the time of death, the Pour-Over Will can be a “last step” measure to redirect the assets into the established trust. These special instances, however, underscore the importance and the advantage of acting early to properly fund a trust. By doing so we greatly diminish the need for the Durable Power of Attorney and eliminate any need of the Pour-Over Will.

About the Company:

Mason & Associates, formerly known as Heritage Law Group, PLLC, is a boutique Estate Planning and Elder Law firm assisting residents in Tennessee and Kentucky. We are dedicated to providing client-centered, professional legal services that are individualized through one-on-one consultations. We delight in empowering our clients and community through education and providing specialized resources. Our integrity-driven team will help you protect your legacy while delivering outstanding quality at a reasonable cost. Your Legacy Is Our Priority™


Jake Mason, J.D., LL.M. (Elder Law & Estate Planning), CELA, EPLS, is the Owner of Mason & Associates Law Firm in Gallatin, Tennessee. He is Certified as an Elder Law Attorney with the National Elder Law Foundation, is board-certified in Estate Planning and Probate by The Estate Law Specialist Board, Inc., of the National Association of Estate Planners & Councils, is accredited by the United States Department of Veterans Affairs, and is licensed in Kentucky and Tennessee. Mason is the only attorney in Tennessee or Kentucky with Board-Certifications in both Elder Law & Estate Planning. Contact us to schedule a consultation via phone, in-office, or video conference at (615) 989-7054 or info@planyourlegacy.com.

SUMNER COUNTY

Mason & Associates

1526 Hunt Club Boulevard, Suite 550

Gallatin, Tennessee 37066

Phone (615) 989-7054

Fax (615) 751-5208

info@planyourlegacy.com

NASHVILLE

 

Mason & Associates

1033 Demonbreun Street, Suite 300

Nashville, Tennessee 37023

(615) 970-7066

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