Understanding what an estate plan is can be a challenging task, since it’s an intangible concept. The best way to think of an estate plan is to picture a basket and funding your trust would be like filling up that basket. The process of creating a trust is a two-step process: first, you create your trust then you fund your trust, and funding your trust has an art to it.
What’s the Objective of a Trust?
The main goal of a trust is to help you avoid the probate court. You can do that by transferring your assets from your name to your trust’s name. The transferring process is called “trust funding”. Your trust can only avoid probate if your assets are the trust name.
Phase 1: The Trust Basket
Imagine a trust as a basket. When you go see a trust attorney, they will create this basket for you. Your plans and needs will be like the decorations or designs on the basket, making everyone’s estate plan a unique basket.
In the first phase of the estate planning process, you create and decorate your trust basket with the help of an experienced trust attorney.
Each person’s basket looks different because each person has different family dynamics, types of assets, value of assets, goals and wishes, and so on.
Phase 2: Funding Your Trust
Just creating your trust basket is not enough. The process is only complete if you fill the basket up. By funding your trust, you transfer assets from your name and place them in your trust. Only your trust can avoid your assets from going to the court, which is why it is crucial to complete phase 2 of the estate planning process.
When your trust basket is created and filled, you have the option of amending it as you go along. You also decide who will hold this basket after you are gone. The right attorney will creat your trust specifically custom fit to your family needs.
This is simply what estate planning is like.
Don’t have your trust yet? Contact Bazikyan Law Group to get a free quote.
