Do you have an unfunded trust?
Planning for the preservation and transfer of a person’s property after their death is called estate planning. A good estate plan includes a Will, powers of attorney, a Living Will (Health Care Directive in Utah(, and often a Trust.
The Unfunded Trust
Trusts avoid the expense and delays of probate court, and they can be powerful estate planning devices, but they don’t work if a person’s property is not correctly transferred into them.
Bill bought a living, revocable trust from a traveling estate planner. He carefully designed a very smart plan for managing his real estate and his business after his death, and he provided for each of his children’s special needs.
After Bill died, his children discovered that his property was not transferred into his trust. Their father had not created the necessary deeds and bills of sale transferring his property into the trust, and he had not correctly designated the trust as the beneficiary of his insurance policies. Another big problem: Bill had not signed a pour-over Will. Bill’s careful planning was wasted.
Bill’s family spent several thousand dollars in a probate court action to transfer his property, the very action Bill tried to avoid.
From the large number of unfunded Trusts coming to our office, I believe thousands of Utahns have them. Many attorneys, estate planners, trust salesmen or internet document sellers expect their client to make the proper transfers, and the client either forgets or doesn’t know what needs to be done.
Is your Trust funded?
Published August 1, 2009