5th Nov 2013

One estate panning mechanism that people use to avoid probate is the creation of a Trust.  With this mechanism, the property, assets and cash resources of the estate owned (known as the Trustor) are transferred and titled in the name of the trust.  For example, William Smith decides to have a Living Trust.  He simply executes a document and then forms a Living Trust with the name of, say, William Smith Trust. 

But can William Smith be secure knowing that his heirs will be free from probate of anything should happen to him?  No, not yet!  He only created a Living Trust without any assets in the name of the Trust.  Mr. Smith has to formally transfer titles of his assets to his Living Trust.  Assets that have been transferred in the name of the Living Trust will not undergo probate, while those not titled in the Living Trust will.  The act of transferring titles of assets from the name of the trustor to the Living Trust is called “Trust Funding.”       

For many Californians, the biggest part of their estate is their real estate holdings.  And the process of transferring titles and deeds from the name of the Trustor to the Living Trust can be a very tedious one.     
Hence, as an Orange County estate planning attorney, I include this transfer with my services.   The process involves several steps to prepare for the actual transfer and recording and annotation of the transfer.  
Of course, it is ideal to have all assets in the Living Trust so that your heirs will not undergo probate.  So, besides the transfer of the titles of his real property, the client should also include his personal assets such as automobiles, jewelry, antique paintings, cash, stock investments, etc.  The transfer of these assets is not as difficult as property assets, but it still is a necessary process.   
First, with the guidance of an estate planning attorney, he can expedite the transfer himself.  The second option is he can authorize his lawyer to do it for him.  Most lawyers will charge an extra fee for such services.  But, I can assure you, that the fee would be worth it.

The paperwork and documentation of “trust funding” may be a down side to having a Living Trust as your primary estate planning document.  However, when you get the process of “trust funding” on track, you will be well on your way to preparing your heirs to a future without probate.  Having counseled many clients as an Orange County estate planning attorney, I can declare that a healthy collaboration between lawyer and client always results in the estate pan getting to follow the wishes of the client.

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