Revocable trusts are a very popular and useful estate planning tool. But the trust will be ineffective if you do not actually place your assets in the trust.
Revocable trusts are an effective way to avoid probate and provide for asset management in the event of incapacity. In addition, revocable trusts — sometimes called “living” trusts — are incredibly flexible and can achieve many other goals, including tax, long-term care, and asset-protection planning.
You can’t take advantage of what the trust has to offer, however, if you don’t place your assets into it. If you don’t fund the trust, your assets may have to go through a costly probate proceeding or be distributed to beneficiaries you did not intend. Not funding your trust can undermine your whole estate plan.
To transfer assets to the trust, whether real estate, bank accounts, or investment accounts,