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For each of the following questions, think about all of your insurance policies, bank accounts, stocks, bonds, investments, real property (home), company, and retirement assets.








What is Trust Funding?

 

Believe it or not, you have “an estate”.  Your estate consists of everything that you own such as your house, car, company, stocks, bonds, gold, jewelry, furniture, etc.  When you have an Estate Plan your estate is contained within three different categories:

  1. Your trust
  2. Accounts, typically held with financial institutions, where you have chosen a beneficiary
  3. Everything else. This category is often referred to as your “probate estate”.

Probate is an expensive court process that occurs after your death.  It involves court fees, newspaper fees, attorney fees, and likely probate referee (appraiser fees).  These expenses will be paid for by your estate.  The court process often takes years.  It occurs exactly during the time when your spouse, children, and/or other family members are mourning your death.  It is stressful, painful, and often leads to in-fighting between otherwise loving families.  Proper estate planning and trust funding avoids probate.

To help explain, consider this metaphor.  Picture yourself deep in the ocean sailing on a sinking ship.  The ocean is the probate process.  Your Estate Plan creates a trust.  The trust acts as a raft.  The raft will protect you from falling into the ocean, but you have to actually get on the raft.  Trust funding is the action of taking everything you own off the sinking ship and placing it on the raft.

In legal terms:

*  The assets contained in your trust will avoid probate.

*  The assets contained in an account with a valid beneficiary designation or proper legal title will avoid probate.

*  If you have significant assets and they are not contained in a trust OR are contained in an invalid beneficiary designation or legal title, then your estate will go to probate.  Take our 6 question quiz to determine if you are at risk. Trust Funding Quiz >

 

*Note* If your trust fails, then your estate will go to probate.  It is very important to hire an attorney who specializes in estate planning.  Please be very cautious before hiring an attorney who “does estate planning on the side.”  Be cautious of any “do it yourself” tool or service.  Always look up an attorney’s California State Bar number to make sure they are licensed and in good standing.

*Warning* Some assets should not be placed into a trust.  Severe tax consequences can result.  Always contact an attorney before engaging in trust funding yourself.

What is Trust Funding?

 

Believe it or not, you have “an estate”.  Your estate consists of everything that you own such as your house, car, company, stocks, bonds, gold, jewelry, furniture, etc.  When you have an Estate Plan your estate is contained within three different categories:

  1. Your trust
  2. Accounts, typically held with financial institutions, where you have chosen a beneficiary
  3. Everything else. This category is often referred to as your “probate estate”.

Probate is an expensive court process that occurs after your death.  It involves court fees, newspaper fees, attorney fees, and likely probate referee (appraiser fees).  These expenses will be paid for by your estate.  The court process often takes years.  It occurs exactly during the time when your spouse, children, and/or other family members are mourning your death.  It is stressful, painful, and often leads to in-fighting between otherwise loving families.  Proper estate planning and trust funding avoids probate.

To help explain, consider this metaphor.  Picture yourself deep in the ocean sailing on a sinking ship.  The ocean is the probate process.  Your Estate Plan creates a trust.  The trust acts as a raft.  The raft will protect you from falling into the ocean, but you have to actually get on the raft.  Trust funding is the action of taking everything you own off the sinking ship and placing it on the raft.

In legal terms:

*  The assets contained in your trust will avoid probate.

*  The assets contained in an account with a valid beneficiary designation or proper legal title will avoid probate.

*  If you have significant assets and they are not contained in a trust OR are contained in an invalid beneficiary designation or legal title, then your estate will go to probate.  Take our 6 question quiz to determine if you are at risk. Trust Funding Quiz >

 

*Note* If your trust fails, then your estate will go to probate.  It is very important to hire an attorney who specializes in estate planning.  Please be very cautious before hiring an attorney who “does estate planning on the side.”  Be cautious of any “do it yourself” tool or service.  Always look up an attorney’s California State Bar number to make sure they are licensed and in good standing.

*Warning* Some assets should not be placed into a trust.  Severe tax consequences can result.  Always contact an attorney before engaging in trust funding yourself.

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