{"id":132,"date":"2011-03-23T15:45:47","date_gmt":"2011-03-23T22:45:47","guid":{"rendered":"http:\/\/www.rbillingslaw.com\/blog\/?p=132"},"modified":"2011-03-23T15:45:47","modified_gmt":"2011-03-23T22:45:47","slug":"unfunded-trusts-pitfalls-for-the-unwary","status":"publish","type":"post","link":"http:\/\/www.rbillingslaw.com\/blog\/unfunded-trusts-pitfalls-for-the-unwary\/","title":{"rendered":"Unfunded Trusts: Pitfalls for the Unwary"},"content":{"rendered":"

Funding the Trust is an essential but often overlooked step towards avoiding a lengthy and expensive probate.\u00a0 Creating a trust instrument, with all of the appropriate instructions, provisos and expressions of intent, is worse than useless if no step is taken to fund the trust by transferring assets into the trust.\u00a0 Even when attorneys draft the trust instrument, they have been known to assume that clients will take this important step without explaining to them the need and importance.\u00a0 The trust consequently remains unfunded.<\/p>\n

\"Saving\"<\/a>
\nAn unfunded trust is similar to a bank account with no money in it, but it is worse than that because of the increased potential for disputes.\u00a0\u00a0 If the distribution specified in a trust is different than the distribution of non-trust assets, chances are good that a fight will occur among the variously affected beneficiaries.\u00a0Sometimes disputes are avoided because the distribution is the same in or out of the trust.\u00a0 For example, if the decedent also left a will that states that all assets are to be transferred to the trust, then the distribution is the same whether the asset is in the trust or in the probate estate.\u00a0 But even in that case a lengthy and expensive probate will be required to transfer the assets into the trust, an unnecessary waste.<\/p>\n

Fortunately, funding is relatively simple and painless.\u00a0 Transferring real estate may take more effort, but most attorneys who draft the trust instrument will also transfer the real estate as part of the estate plan.\u00a0 The next posting here will summarize the steps for funding a trust.<\/p>\n

In the meantime, it pays to remember that once the ink is dry on the trust instrument, the work of setting up a living trust is not yet done.\u00a0 Assets still need to be transferred to the trust in order for the trust to be effective.<\/p>\n

\"Creative<\/a> photo<\/a> credit: Ken Wilcox.<\/a><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"

Funding the Trust is an essential but often overlooked step towards avoiding a lengthy and expensive probate.\u00a0 Creating a trust instrument, with all of the appropriate instructions, provisos and expressions of intent, is worse than useless if no step is … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[161,5,6,39],"tags":[40,9,159,163,41],"_links":{"self":[{"href":"http:\/\/www.rbillingslaw.com\/blog\/wp-json\/wp\/v2\/posts\/132"}],"collection":[{"href":"http:\/\/www.rbillingslaw.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.rbillingslaw.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.rbillingslaw.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.rbillingslaw.com\/blog\/wp-json\/wp\/v2\/comments?post=132"}],"version-history":[{"count":6,"href":"http:\/\/www.rbillingslaw.com\/blog\/wp-json\/wp\/v2\/posts\/132\/revisions"}],"predecessor-version":[{"id":139,"href":"http:\/\/www.rbillingslaw.com\/blog\/wp-json\/wp\/v2\/posts\/132\/revisions\/139"}],"wp:attachment":[{"href":"http:\/\/www.rbillingslaw.com\/blog\/wp-json\/wp\/v2\/media?parent=132"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.rbillingslaw.com\/blog\/wp-json\/wp\/v2\/categories?post=132"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.rbillingslaw.com\/blog\/wp-json\/wp\/v2\/tags?post=132"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}