New York Estate Planning Attorney on Funding of Trusts

March 13, 2012

This weekend the Times Herald-Record published an article written by our New York elder law estate planning attorney, Bonnie Kraham, discussing a basic estate planning concept--the proper funding of trusts. There is often a misunderstanding among some residents about the effect of signing the trust documents. Signing the trust documents is a necessary but not sufficient way to ensure the overall estate planning process works as intended. It is also crucial to actually transfer assets into the trust. This does not happen automatically. Transferring assets into a trust--known as "funding" the trust--usually requires changing title of those assets to the name of the trust. This process should also involve identification of the trustee and date of the trust's establishment.

Of course, the delicate nature of the funding process makes it imperative that it be done in conjunction with one's estate planning lawyer. In this latest article Attorney Kraham discusses some of the ways that funding occurs for various types of assets. For example, real estate is one of the most common assets that area residents might have and want to protect by putting into a trust. To transfer real estate into a trust one must sign a new deed in the name of the trust. That deed must be recorded at the county clerk's office. Considering that one's home is often the largest single asset that a community member has, understanding this process and performing it properly is crucial.

Many local residents may also have assets like stocks, bonds, and mutual funds that should be placed in a trust. Ownership changes for these assets usually require filling out certain paperwork providing by those in charge of managing the asset--a broker, investment company, or transfer agent. Similarly, savings bond transfers require filling out a reissue form from the Federal Reserve Bank of New York. Moving a brokerage account into a trust is a bit more extensive. A trust account application must be completed along with an account transfer request. The transfer request essentially authorizes the broker to close the account and transfer the securities into the new trust. To transfer a stock certificate one must fill out a "stock power" and W-9 form. Those items must then be mailed with the original stock certificates to the "transfer agent" of the stock company.

Local residents may have various other assets that should be transferred into trusts as well--like bank accounts and certificate of deposits (CDs). Each has its own unique transfer process. Please do not try to do this on your own. Ensure that everything is done properly so that the trust works as intended by having the help of your New York elder law estate planning attorney at all times.

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