How Does a Trust get Funded?

Crossroads Funding Decision

How Does a Trust get Funded?

In order for your trust to be an executable document and a trust in itself the trust must be funded. That means that the assets name must be changed from the current name to the name of the trust. For Example, if you own a home, you will want a new deed drawn up changing the name from John and Della Smith in Joint Tenancy to the Smith Family Trust. The Deed would then be recorded with the Sonoma County Recorder's Office. Chain of Title will then be updated and the property will pass based on the provisions of your trust. 

Why is it Important?

If you do not fund your trust your trust could be ineffective and someone else could inherit your property. Your case will go to court and end up costing your beneficiaries time and money.

Make sure you work with an Attorney in Santa Rosa, California that not only writes solid trusts but also demands to fund your trust and insures an easy non-public transition for your loved ones.

 

Below is a recent case that showcases the result of an unfunded trust.  

 

Carne v. Worthington 


Filed April 13, 2016, Fourth District, Div. One Cite as D067756

 

Decedent executed a revocable trust in 1985 (the “1985 Trust”), and real property located on Via Regla was transferred to the 1985 Trust. Decedent executed an irrevocable trust in 2009 (the “2009 Trust”) which stated, “I transfer to my Trustee the property listed in Schedule A, attached to this agreement.” The sole asset listed on Schedule A was the Via Regla property. Decedent’s daughter filed a petition to confirm the validity of the 2009 Trust and that the Via Regla property was an asset of the 2009 Trust. The trial court found the transfer of Via Regla to the 2009 Trust was not valid because decedent was required to transfer title to the Via Regla property by a deed, and because decedent did not personally own the property at the time of the transfer.

 

The appellate court reversed. The language quoted above in the 2009 Trust was sufficient to convey the property to the 2009 Trust, and decedent was not required to execute a deed. While decedent did not own the property individually at the time of the transfer, his signature on the 2009 Trust was sufficient to convey title from the 1985 Trust to the 2009 Trust because the 1985 Trust was a revocable inter vivos trust, he owned the property as sole trustee of the 1985 Trust, and he had the power to transfer real property owned by the 1985 Trust.

 

James Zakasky
An estate attorney who goes beyond drafting wills and creating trusts