What is funding a trust and how does it work? The term "funding a trust” may cause confusion and rightfully so, because it suggests you are paying for the trust itself. This is not necessarily true. Funding a trust means you are transferring assets from the “grantor,” the creator of the trust, to the trust itself.
Transferring assets to a trust can be done by the grantor if they’re still alive. All the funding must be done prior to the grantor’s passing. Once the grantor has passed, they lose the ability to transfer assets into the trust. Further, any assets left outside of the trust will need to be probated.
A trust is an agreement between a grantor, and a trustee. A trustee is an individual chosen by the grantor and acts on their behalf regarding the distribution of their assets to designated beneficiaries. They are selected to follow the grantor’s estate plan as it is listed.
The trustee can receive responsibility for the grantor’s assets once the grantor has reached a state where they are no longer mentally competent or have passed away.
There are several steps to funding a trust in the state of Oklahoma, including creating the trust document, selecting which assets to transfer, transferring those assets to the trust, preparing deeds, checking in with financial institutions, and updating your designated beneficiaries.
Of course, you may be subject to legal fees if you utilize the help of an attorney, appraisal fees to determine the value of any assets, or transfer fees from financial institutions for transferring assets to your trust.
It’s important to speak with an estate planning attorney to make sure your trust is properly funded, even after your passing.
To gain a better understanding of the trust funding process, call Ball Morse Lowe today at 405.701.5355 or email clientintake@bml.law. We look forward to hearing from you. www.bml.law