TRUST FUNDING INSTRUCTIONS

Trust funding plays a crucial role in estate planning and asset protection. Here are some key reasons why trust funding is important:

1. Implements your long-term care plan and asset preservation: By properly funding your trust, you ensure that your assets are held within the trust and can be utilized to implement your long-term care plan, protect your assets from potential creditors, and preserve them for the benefit of your beneficiaries.
2. Ensures your plan is executed for maximum protection: Trust funding ensures that your estate plan is executed according to your wishes and provides the best possible protection for both you and your beneficiaries. It helps avoid potential challenges or disputes regarding asset distribution.
3. Avoids probate: Funding your trust helps to bypass the probate process, which can be time-consuming, expensive, and subject to public scrutiny. Assets held within a properly funded trust can pass directly to your beneficiaries without the need for probate proceedings.
4. Eases administration of your estate: Trust funding simplifies the administration of your estate. When your assets are held in the trust, it becomes easier for your designated trustees to manage and distribute those assets according to your instructions, thereby streamlining the administration process.
5. Simplifies future Medicaid planning: Proper trust funding can assist with future Medicaid planning. By transferring assets into a trust, you can potentially reduce your countable assets for Medicaid eligibility purposes, making it easier to qualify for long-term care benefits while preserving your assets for your beneficiaries.

Trust funding typically occurs after your trust is fully executed, meaning all necessary signatures have been obtained. There are two primary methods of trust funding:

1. Changing title or ownership: Assets such as real estate, life insurance policies, mutual funds, and bank accounts can be transferred to your trust by changing the title or completing a change in ownership form.
2. Naming the trust as beneficiary: Assets with beneficiaries, such as IRAs, retirement plans, annuities, and life insurance policies, can designate the trust as the beneficiary.

Each financial institution, life insurance company, or transfer agent may have specific procedures for trust funding. It is essential to contact each company for their transfer forms and follow their requirements, which may include providing trust-related documentation, authorization for information release, and signatures of the current owner and trustees.

After submitting the required documentation, it’s advisable to request verification from the company that the asset has been successfully transferred into the trust. This verification can be in the form of a letter confirming the changes, a statement listing the trust as the new beneficiary or owner, or a stamped/copy of the request.

To learn more about estate planning and elder law, visit Estate and Elder Planning by David Wingate at www.davidwingate.com. For an Initial Consultation, call (301) 663-9230. We can assist you with powers of attorneys, living wills, wills, trusts, Medicaid planning, and asset protection. With office locations in Frederick, Washington, and Montgomery Counties, Maryland, we are here to provide you with peace of mind.

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The information provided in this blog post is for general informational purposes only and should not be construed as legal advice. While we strive to provide accurate and up-to-date information, laws and regulations regarding dementia, estate planning, and elder law can vary by jurisdiction and may change over time.

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