Yorkville, Illinois Trust Funding Attorneys

Estate Planning Lawyers Helping Families Fund Trusts Correctly in Yorkville

Multiple types of tools can be used in a comprehensive estate plan, including trusts. However, creating a trust is only the first step. Before a trust can accomplish its intended purpose, it must be funded, meaning that assets must be transferred into the name of the trust. Failing to complete this step is one of the most common reasons an estate plan may not work as intended.

People may mistakenly believe that signing a trust document will automatically place their assets under the trust's control. In reality, a trust is simply a legal container. Until specific assets are formally retitled or transferred into the trust, it will have no authority over them. Those assets may still be subject to probate or distributed outside of the trust. At Gateville Law Firm, our lawyers can help families in Yorkville, Illinois and the surrounding communities complete the trust funding process correctly. With our help, families can make sure trusts will actually hold, control, and distribute the assets they were designed to protect.

Why Failing to Fund a Trust Is a Common Cause of Estate Plan Failure

A trust that has not been properly funded will provide none of the benefits it was created to provide. If real estate is titled in a person's individual name, that property will not avoid probate simply because a trust exists. If a bank account is never retitled, the funds in the account will not be protected or distributed according to the terms of a trust. This gap between paperwork and actual asset ownership may not be discovered until after a person has passed away, and at this point, it will be too late to correct the problem without going through probate.

This issue tends to arise for a few common reasons. Some people may sign trust documents and assume that someone else will automatically handle the transfer of assets. Others may transfer some assets into a trust at the time it is created, but they may fail to fund new assets that are acquired later, such as a newly purchased property or a new investment account. Trust funding will require action for each individual asset, and certain assets may be overlooked if the proper steps are not taken.

Types of Trusts and the Assets They Can Hold

Different types of trusts may be used for different purposes, and understanding what each trust is designed to hold can help to clarify the funding process. Our attorneys can provide guidance on the best ways to use trusts such as:

• Revocable Living Trusts: These trusts are commonly used to avoid probate while also ensuring that a person can manage their assets and use them for specific purposes. A living trust can hold real estate, bank and investment accounts, business interests, and other types of property, and the person who created the trust may maintain full control and make changes during their lifetime.
• Irrevocable Trusts: Once funded, assets placed into these trusts generally cannot be easily removed. Irrevocable trusts may be used to hold real estate, cash, or life insurance policies for purposes such as long-term care asset protection or reducing estate taxes.
• Testamentary Trusts: Unlike living trusts, these trusts are not funded during a person's lifetime. Instead, a trust will be created through the terms of a will, and it will be funded after a person's death. Their assets will be transferred into the trust through the probate process, and instructions will be provided for how assets will be distributed to beneficiaries.
• Land Trusts: Certain types of trusts may be used to hold the title to real estate property. A land trust can provide privacy benefits, since the trustee, rather than the individual owner, will appear on public property records. A land trust can be coordinated with a person's broader estate plan, ensuring that real estate property and other assets will be managed correctly.

Our firm has extensive experience in real estate law, and we can help clients understand the specific procedures and requirements involved in funding trusts with real estate property. We can coordinate deed preparation, recording requirements, and any related issues, ensuring that assets will be managed and distributed correctly.

Steps Involved in Properly Funding a Trust

While the specific steps that will be followed may depend on the types of assets involved, trust funding will generally involve the following steps:

1. Complete a Full Inventory of Assets: The funding process begins with identifying every asset a person owns, including real estate property, financial accounts, business interests, and personal property, ensuring that nothing is overlooked.
2. Prepare and Record New Deeds for Real Estate: Real property must be transferred into a trust through a properly prepared deed, which will then be recorded with the appropriate county office to reflect the change in ownership.
3. Retitle Financial Accounts: Bank accounts, brokerage accounts, and other financial holdings will need to be retitled in the name of a trust. Our lawyers can work directly with financial institutions to ensure that accounts are retitled correctly.
4. Update Ownership of Business Interests: Interests in a business, such as shares in a corporation or membership interests in a limited liability company, may be transferred into a trust. Our attorneys can make sure the proper documents are prepared while advising clients on the best ways to establish business succession plans.
5. Review Beneficiary Designations: Retirement accounts and life insurance policies may need to be updated to ensure that they will be distributed to beneficiaries correctly after a person's death. Our lawyers can make sure beneficiary designations are coordinated with trusts and other estate planning documents, and we may take steps to ensure that funds or life insurance benefits will be transferred into trusts and distributed to beneficiaries correctly.
6. Address Personal Property: Items such as furniture, artwork, or collectibles may be transferred into a trust through a general assignment document, rather than requiring individual title changes.
7. Confirm and Document Each Transfer: Once each asset has been addressed, our attorneys can help clients maintain clear records of what has been transferred, which will confirm that funding is complete and provide documentation for future reference.

Frequently Asked Questions About Trust Funding

Contact Our Yorkville, IL Trust Funding Lawyers

A trust can only protect assets that have actually been transferred into it. Proper funding is essential to make sure an estate plan will work in the way it was designed. At Gateville Law Firm, our lawyers can help with every step of the estate planning process, including trust funding. Contact our Yorkville trust funding attorneys at 630-780-1034 to schedule a consultation and make sure your trust is properly funded.