After I have signed my trust, what are the next steps?
Executing a revocable living trust is an excellent way to streamline an estate plan, avoid probate, and provide for loved ones. However, without proper trust funding, the document is essentially useless and will serve no purpose to either the grantors or their beneficiaries. Accordingly, it is essential to engage in the proper follow-up steps after executing the trust, which can be facilitated with the help of a knowledgeable Michigan estate planning attorney.
One of the most important aspects of trust funding is issuing a deed-to-trust from the current owner(s) to the name of the trust. In most cases, this is a simple procedure that involves drafting a new deed conveying the property from the grantor(s) into the name of the trust. The deed is then recorded and the “owner” of the property becomes the trust instead of the individual. This way, when it is time for the property to pass to the named beneficiaries, the transfer will occur based on the directives of the trust, and formal probate proceedings will not be necessary.
As a word of caution, however, grantors with an outstanding mortgage on a property should contact their lender before transferring ownership to trust. While it is often not a problem, lenders have been known to trigger the acceleration clause in the mortgage, citing an unauthorized change in ownership.
Titled personal property
Vehicles, boats, firearms, and other property with a title or ownership document should be transferred into the name of the trust as well. Depending on the item, this generally requires a trip to the Secretary of State, and may require payment of a small fee. Much like real property, personal property that is titled in the name of the trust will transfer to the intended beneficiary immediately upon the death of the grantor, and it will not be necessary to distribute these items through the probate process.
If you would like more information about the proper way to fund a trust, please do not hesitate to contact Andrew Byers, Attorney and Counselor at Law. Serving clients throughout the metropolitan Detroit area, we can be reached at 248.301.1511.