Valley of the Sun, AZ

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Is Your Trust Funded?

  June 07, 2017


By Rob Siddoway, Dana and Associates, LLC

The critical final step
It feels good to be organized. It is a nice feeling when clothes are folded and put away, when the dishes are clean and in the cupboard, and knowing your taxes are done for another year. In meeting with clients over the years, it has given me a great deal of personal satisfaction to see how relieved clients are when they have put their financial and estate affairs in order. Having that estate planning binder in the safe at home lends a certain level of satisfaction that you are on top of things. Are you really done? Did you complete the critical final step?

Funding your trust
A common misconception I have seen in my years of practice as an attorney and a Certified Financial Planner® is that once the documents are done, we should be “good to go.” I have often done a trust review meeting for a client who had their documents prepared by another law firm or document preparer, only to learn that things had not been finished. In order for those documents to have a real effect on your estate, the trust must be funded — in other words, it must own things or have a beneficiary interest in your things for it to really do what you want it to do.

Filling the bucket
Your trust is a contract that you created, and generally you manage (or perhaps assign someone else to manage), for your own benefit, and eventually for the benefit of someone else. Think of it like a bucket that holds all of your stuff (home, bank accounts, investments, etc.). You get to choose what goes in the bucket — you get to manage the stuff in the bucket, and while you are alive, you get to benefit from everything in the bucket. What makes this bucket so neat is that eventually you have the option to choose someone else to manage the bucket, and you even get to choose someone else (or an organization like a non-profit) who gets to benefit from that bucket. You also get to choose whether everything gets poured out to those individuals or organizations or whether they get to keep it in their own bucket. Here’s the catch — if there is nothing in the bucket when you pass on, none of it matters and who knows what chaos may ensue.

Asset coordination meeting
So, how do you ensure everything is funded? You sit down with qualified professionals that can help walk you through the process of what needs to be done. In this meeting, they should review and go through each asset a client owns to determine first, whether it should go in the bucket, and second, how to get it in the bucket. Generally, clients will walk away with a list of three to five homework assignments (depending on the complexity of the estate and assets) where they may need to make some phone calls, perhaps fill out some beneficiary forms, and sometimes make changes to the title owner of an account or asset.

Peace of mind
I know homework is not fun, but if you really want that feeling you get with folded laundry, clean dishes, finished taxes, etc., you need to make sure you have properly funded your trust. Meet with your advisors — ask them to help you.

If you want a review or need a second opinion — call Dana and Associates at 480-924-4424, we will be happy to setup a free consultation or a complimentary Asset Coordination Meeting. Is your bucket full?

At Dana and Associates, we offer a free Asset Coordination Meeting where we meet with every client after their documents are signed and completed — we even offer a free trust review if the documents were prepared somewhere else to determine their quality and whether it has been funded properly.
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June 07, 2017

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