There is a great deal of confusing terminology that comes with planning your estate. If you are considering starting a trust, you may wonder what it means to fund one. All living trusts need to be funded before they are considered to be fully functioning trusts.
If you are starting to consider creating a trust in Massachusetts, it is a good idea to conduct thorough research and get familiar with the terminology. That can help you be prepared and equipped with the knowledge that you need.
Funding a trust
The process of creating a trust involves taking assets that you own personally and transferring them over to a trustee. Essentially this means that while your assets are in the revocable trust, you no longer legally own them, and the trustee does instead. At the end of your life or at a predefined date within the terms of the trust, the assets will be transferred to the beneficiary.
The trust needs to be funded before the trustee will have a legal right to them. Any assets that you do not fund the trust with will likely have to go through the probate process after your death. This can be a costly and lengthy process.
If you are considering creating a living trust in Massachusetts, it is important to think about what assets you will use to fund the trust, and who you would like to be the beneficiary of the trust. An experienced Massachusetts estate planning attorney can help you set up the trust as part of your overall estate plan.