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Tag: DC Trusts

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Funding a Trust

Irish-handsAfter creating a trust, you need to fund it. That does not have to be a difficult process.

One of the many problems of “discount” trusts, either from a trust service or an online document service, is that they never get around to funding the trust. When the settlor passes away, the trust does not work as intended, because there are no assets in it to be distributed according to the terms of the trust. The time and money spent creating the trust were all wasted.

Trusts must be funded. That does not mean just putting money in them. It means transferring the title of property to the trust, as the Times Herald-Record discusses in “How to transfer assets to a trust.”

Transferring title of property differs for different types of assets. However, it does not need to be difficult for any asset type. It is mostly a matter of filling out the right paperwork and getting that paperwork to the proper authority. For example, when you purchased your home, the title was transferred to you and registered with your local Register of Deeds. You just need to do the same thing for the trust this time.

There is someone who can help you make sure that your trust is properly funded. That is an estate planning attorney who knows how to transfer title in different asset types. This is one reason why it is better to hire an attorney to create a trust, instead of using a cheaper service. It helps make sure that your trust gets funded and will be effective when it is needed.

Reference: Times Herald-Record (May 31, 2018) “How to transfer assets to a trust.” 

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Revoking a Trust

Irish-handsPeople commonly wonder if they can revoke a trust that they no longer like and if they can have more than one trust. The answer is not a simple yes or no.

A reader recently asked a NWI Times column “Can an individual establish more than one trust?” It seems that the reader was curious whether he could have more than one trust and if creating a second trust would automatically revoke the first one.

These are common questions because most people are more familiar with the law of wills than of trusts. A person cannot have more than one will and creating a new will is an automatic revocation of any previous wills. Trusts do not work like that.

It is possible for a person to have more than one trust. It is not uncommon when people want to accomplish different things with different trusts. However, the assets put into the trusts cannot be the same and most people have no reason to have more than one trust. What most people seek to accomplish with a trust, can best be done with only one.

Whether and how a trust can be revoked, depends on what type of trust it is. Some trusts are created to be revocable at any time, but an attorney should create the trust.

Other trusts are created to be irrevocable. Sometimes they can be revoked but there are often tax penalties for doing so. It is usually advisable to amend an irrevocable trust where and how state law allows.

If you have questions about a trust you have created, it would be best to consider meeting with an estate planning attorney.  Profit Law Firm has estate planning attorneys with meeting locations in Chevy Chase, Greenbelt, and the District of Columbia.

Reference: NWI Times (Feb. 18, 2018) “Can an individual establish more than one trust?”