Why it is important to fully fund a trust

When people in Louisiana plan for the future, trusts can be an essential part of an estate plan. The flexibility and control that they provide can help people to create a comprehensive plan for their assets that supports their loved ones over time and avoids the difficulties that can come with probate. However, in order to make a trust operational, it is crucial to not only create the relevant trust documents but also to make sure that the trust is fully funded with all of the property that is to be included.

For example, many people include real estate in their trusts. Transferring real estate requires issuing a new deed to the property, so it is formally transferred from the current owner to the newly created trust, with the owner as trustee. This deed will need to be recorded in order to change the official owner on file. In addition, there can be some other important housekeeping tasks that can accompany the re-titling of real estate in the name of a trust. Homeowners may need to re-file for tax exemptions and will need to inform their homeowners’ insurance providers of the change.