What to Do After Your Trust is Signed

Money on a balance scale with a house and family

For many families, a revocable or irrevocable trust is a key part to their estate plan. However, unlike a Will, which is complete as soon as it has been executed, there is still work to be done after your trust is signed. Find out what to do after you leave the estate planning attorney’s office.

A Trust is a Legal Entity, Not a Piece of Paper

When most people come into an estate planning attorney’s office, they are thinking about taking care of their family, not creating a new legal entity. Technically, that is what a trust is. You can think of a Will as a set of instructions for the Court about what to do with your assets after you pass away. A trust, on the other hand, is more like an organization you set up to handle your affairs for you, before and after your death.

The reason why a revocable trust allows your loved one to skip the Florida probate process is because the legal entity of the trust lives on, even when you do not. In that way it is similar to a business -- once it is established it exists independently, no matter who is controlling it.

This is why it is so important to name successor trustees in the initial trust documents. While you are alive, you (and your spouse if you have one) will usually be the primary trustee in control of your revocable trust. You will have the ability to use the trust assets to sustain yourself, pay your bills, and enjoy your final years, with full discretion to use your assets however you wish. Once you pass away or become unable to make your own decisions, the job of managing your trust passes to whomever you listed as a successor trustee. However, while you may have had access to other assets beyond your trust while you were alive, including retirement or savings accounts in your own name, your successor trustee will be limited to the funds and assets you transferred into the trust itself.

What Happens if You Don’t Fund Your Trust

That is why it is so important to fund your revocable trust after you create it. Funding a trust refers to the process of transferring money and other assets from accounts in your own name to accounts in the name of the trust (with you acting as primary trustee). Unfortunately, far too many Florida residents skip this crucial step when creating their trust. They sign the trust paperwork and then carry on as normal, continuing to do everything in their own names, rather than through the trust entity.

That is how families with trusts end up back in Florida probate court. When a person passes away, the trust lives on and operates without the oversight of a probate judge. However, anything that is not a part of that trust (or exempt for other reasons) must still be probated. This is true even if your estate planning attorney created a pour-over Will, which transfers any assets a person has to the trust upon his or her death. In that case the probate court must oversee that transfer, which if there are substantial assets, could be almost as difficult and time consuming as if there was no trust to begin with.

How to Fund a Trust

The key is to complete those transfers and fund the trust before you need someone else to handle your affairs. The best time to fund a trust is immediately after it is created. Depending on the assets that make up your estate that could include:

  • Executing deeds transferring title ownership of land or homes.
  • Opening new bank accounts in the trust’s name and transferring money to them, or naming the trust as a pay on death or transfer on death beneficiary for bank accounts in your own name.
  • Naming the trust as beneficiary on IRAs, 401ks, and other retirement assets. (Handling these types of assets is tricky and the appropriate way to set it up should always be discussed with your attorney).
  • Designating the trust as beneficiary for any life insurance policies.

Many different banks, insurance companies, financial institutions, and pension administrators have their own rules and processes as to how trust funding happens. Often they will ask to see all the trust documents, even when they shouldn’t or don’t need to. Other times their forms will be confusing, or it may be unclear who does or should have authority to make changes to the trust accounts.

That’s where Harrison Estate Law can help. We don’t stop representing our clients once the trust documents are signed. Instead, we offer ongoing support services to help our clients properly complete the paperwork and fund the trust. If you have trouble working with the financial professionals or find the process troublesome or time consuming, we can help you prepare all the proper documents and speak to plan administrators on your behalf. We can even go with you to the bank to be sure everything is done right.

At Harrison Estate Law, we don’t treat a trust like a piece of paper. We know how important it is to follow up by funding your revocable trust, and what can happen if you skip this crucial step. Please contact us online or via email or call 352-559-9828 to schedule a free consultation. If you don’t live close to Gainesville we are happy to set up a phone or Zoom call.

Categories: Trusts