When is the right time to fund a living trust?


Living trusts offer a convenient “hybrid” approach to estate planning that combines many of the most important protections that make trusts useful while foregoing some of the most frustrating restrictions that other trusts keep in place. While this flexibility comes at the cost of some of the more detailed protections that more unwieldy trust provide, many individuals find that the added access to assets and flexibility in altering terms of a living trust are worth the trade off.

However, because a living trust is so much more flexible than other trusts, it is not always easy to know when is actually the best time to fund the trust, or if it is even necessary to fund the trust directly at all.


Those who choose to fund their living trusts now do enjoy the benefits and protections the trust offers immediately, but even living trusts may present complications for those who own certain types of property that may require regular interaction or provide additional stability to the owner. This is common when it comes to real estate holdings, which an owner may wish to place in a trust to enjoy tax and probate protections, but may also need to retain ownership in order to refinance the property for better interests rates or to borrow additional funds against the value of the home. In many cases, the underwriter of a mortgage requires the individual refinancing a property to legally own the house rather than have it placed inside a trust.

Your needs may be different than those of you neighbors or other community members and colleagues, and the legal options that make sense for them may not make sense for you. Do not wait to carefully research the benefits and drawbacks of funding your living trust, so that you can protect your rights and your financial priorities using these tools and many more.

Source: FindLaw, “How Do I Put Money and Other Assets in a Living Trust?,” accessed March 09, 2018

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