Funding an Oregon trust isn’t just about money, it’s about transferring assets from your ownership to the trust’s
Setting up a trust? Check. But this isn’t about setting up your Oregon trust. That’s its own process. Just as important as starting your trust, is funding the trust. But… what does it mean to fund a trust in Oregon?
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“If you don’t fund an Oregon trust, the property you meant to go into the trust never becomes part of the trust.”
What does it mean to fund a trust in Oregon?
The difference between setting up a trust and funding a trust is like the difference between buying a house and moving in your furniture.
If you buy your house, sure, you have a house. But once you move in your furniture, your house is serving much more of its intended purpose.
After you set up a trust, funding a trust means changing the ownership of assets from you to the trust. It’s what puts property under the protection of the trust. Then the trust can fulfill its intended purposes, such as more seamlessly putting trust property to the benefit of those you intend its use for.
Funding an Oregon trust isn’t just about finances
“Funding a trust” is common expression. It essentially means adding or transferring assets and property to the trust. While that can mean finances, it isn’t just about financial assets, such as savings or investments.
Funding a trust simply means transferring any asset or property to the trust in general.
An Oregon trust must own assets in order to do its job
At its most basic level, a trust is a special type of legal entity that can own and distribute property. Trusts make it possible to provide for people in your estate, and assets held in a trust generally don’t have to pass through probate.
The law recognizes many kinds of trust, including trusts that can provide for people with disabilities. However, something that all trusts have in common is they must own and hold assets, in the name and under the ownership of the trust, in order for the trust to do its job in the first place.
What happens if you don’t fund an Oregon trust?
Some assets and property have a clear and stated owner, such as a financial account, vehicle, or home. The trust has to be designated as the owner in order for the property to be considered part of the trust. If the property isn’t held in the trust’s name, then it may not be part of the trust.
For example, a financial account in your name remains part of your personal property and your estate. If it’s not part of the trust, then after you pass away, the terms of your will or under the state’s default laws for distributing property as part of an estate will manage that account, not the trust.
If not held in the name of your trust, the account would have to pass through probate. That will make it take longer for any funds to be of use to the people who receive them. And the people who receive those funds might not be who you intended, since the account was never part of the trust, and therefore never subject to the rules and terms of the trust.
If you don’t fund an Oregon trust, the property you meant to go into the trust never becomes part of the trust. The trust doesn’t own property that’s in your name. That means that property won’t be handled or distributed the way you intended under the terms of the trust.
What steps do you need to take before you fund your Oregon trust?
For assets that you want to be part of the trust, funding your Oregon trust means that you transfer ownership of property you own into the trust. That can include real property, business interests, insurance policies, equities, bonds, savings accounts, and much more.
Prior to funding your trust, list out all the assets and property that will become part of the trust.
A typical trust will also have multiple parties involved, such as your estate attorney, the beneficiary or beneficiaries, and the trustee. The trustee has a key role: They maintain a fiduciary duty to run the trust for the best interests of any beneficiaries and the grantor. Any or all of these parties may be involved in funding the trust, maintaining the list of assets, and ensuring that the trust is properly funded.
Prior to funding your trust, do the following
- You’ll have coordinated with your estate attorney to set up the correct trust for your situation.
- The trust will be established according to the law.
- Make an inventory of the properties and assets that will become part of the trust, from accounts to personal property.
- Organize documents relevant to the ownership of any piece of property to go into the trust, such as vehicle titles and deeds for real properties.
- Open financial accounts in the name of the trust.
- Follow processes to transfer an asset to the trust, such as updating property deeds to show the trust as the owner, or working with financial institutions to change the account owner to the trust.
- For personal property that does not have official owner documentation, you can make a list with descriptions of the items that the trust owns. Some trust owners might coordinate with their estate attorney to draft and sign a general transfer document, where the property owner officially declares what personal property is now under trust ownership.
- Confirm asset transfers with relevant parties.
- Maintain all physical and/or digital assets in safe and secure locations.
Remember: Some types of property have their own required process
For property, vehicles, and financial assets, relevant institutions and government entities will have specific processes to follow, and these will vary from entity to entity.
How do you know when the trust is properly funded?
Once the property names the trust as owner and relevant documents and records reflect trust ownership accordingly, typically that confirms the Oregon trust’s proper funding.
Over time and as life events happen, it’s also a good idea to regularly review the trust and update assets and beneficiaries.
Funding is an essential step for your Oregon trust to serve its purpose in your Oregon estate
Establishing the right trust is a critical early step for your estate to benefit those you intend to benefit. However, it’s only by funding your Oregon trust that the trust can fulfill its purpose.
From identifying the right trust for your situation to following the processes to correctly fund the trust, the right Oregon estate attorney is here to help:
