Funding Your Living Trust


Signing a living trust isn’t the end of the estate planning process. You also need to fund a trust. Knowing how to fund a living trust is vital for the trust to accomplish its goals.

Funding a living trust involves transferring property to the trust. An asset not transferred to the trust is not owned by the trust and will be subject to probate (unless you’ve used another technique to avoid probate). In short, if there is no living trust fund, there is no living trust. How to fund a trust varies depending upon the nature of the property. You can transfer ownership, or, in some cases, designate the trust as a beneficiary upon your death.

  1. Transfer Real Estate

Transferring real property to a trust requires a deed, typically a quit claim deed.

A Lady Bird Deed is included with a complete Estate Plan package from T.L. Morson and Associates, PLLC. 

  1. Transfer Titled Personal Property

If personal property has a title document (cars, trucks, motorcycles, RVs, ATVs, boats, airplanes), it will be necessary to obtain a new title showing the living trust as the owner. In some states you can designate your trust as a beneficiary on a motor vehicle title, which keeps the vehicle in your name, but automatically transfers it to the trust upon death.

Caution: Find out if transferring ownership will result in substantial taxes or fees. If the vehicle is subject to a lien, get the approval of the lender. Also, ask your insurer if a transfer will affect your premiums.

  1. Fund Untitled Personal Property

Personal property without a title document (furniture, books, jewelry, tools, collectibles, etc.), can be transferred with an assignment of ownership document, which must be signed and dated.

It is important to adequately describe the property, so that there is no doubt about its identity.

  1. Transfer Bank Accounts

Bank Accounts should be retitled in the name of the trust.  This generally requires providing a copy of the certificate of trust and the signing of new banking documents.

  1. Fund Securities

Brokerage accounts much like bank account need to be retitled in the name of the trust.  This is generally accomplished by providing a copy of the certification of trust and new brokerage account paperwork.

  1. Transfer Business Interests

Interests in partnerships and LLCs, and shares in a corporation, can be retitled in the name of the trust. Check the partnership agreement, LLC operating agreement, or articles of incorporation, for transfer restrictions or procedures.

  1. Change Life Insurance Beneficiaries

Your trust can be the owner and/or the beneficiary of a life insurance policy. Making the trust the owner allows the trustee to manage the policy in the event you become mentally incapacitated, such as borrowing against the policy to obtain funds for your care.

Caution: In many states the cash value of a policy is exempt from creditors, but only if it is owned by the individual. Protection against creditors may be lost if ownership is transferred. Instead, you could use a power of attorney to allow someone to manage the policy.

  1. Transfer Royalties, Copyrights, Patents, and Trademarks

Whoever pays the royalties can advise you what is required to transfer the interest to your trust. Consult the United States Copyright Office for copyrights, and the United States Patent and Trademark Office for patents and trademarks.

  1. Gas, Oil, and Mineral Rights

The nature of these rights varies. If the rights are part of property you own, you can use a deed. If you own rights in property you don’t own, or have a lease or royalty agreement, an assignment of rights document will be necessary. Contact whoever pays you to learn what will be required to make the change. The document may need to be recorded. This is a complicated area, so you may want to consult an attorney.

  1. Accounts Receivable

An assignment of rights—a legal document changing who has the right to a debt – can make your trust the recipient of payments received on loans you have made to anyone (such as an unsecured personal loan or a loan secured by a mortgage).

  1. Making The Trust as Beneficiary

Some assets may not be transferred to a trust, but you may be able to make the trust the beneficiary upon your death. These assets include:

  • Retirement Accounts. Do not retitle any qualified retirement account, such as IRAs, 401(k)s, 403(b)s, or qualified annuities, including those in brokerage accounts. This will be considered a withdrawal of the funds, subjecting them to income tax and maybe penalties. Instead, change your beneficiary designation. Whether your trust should be the primary or secondary beneficiary depends upon your situation and tax laws.
  • Medical Savings Accounts (MSAs) and Health Savings Accounts (HSAs). Your trust should be designated as either the primary or secondary beneficiary (like a qualified retirement account).

By transferring your assets into your living trust, you bring them under the legal protection of this powerful estate planning tool. Once the trust is funded, the assets it holds will be protected from probate in most cases and offer your family peace of mind.

What Does Estate Planning Mean?

Yes, we all have an estate. Your estate consists of everything you own. So, big or small, everyone has an estate and regardless of size, you cannot take it with you when you die.

Planning the Inevitable

When the inevitable happens  you like most people, will probably want to control how those things are devised.  To ensure that your wishes are carried out, you need a plan.  A Plan states who you want to receive  your assets and when.  You will want this to happen in the most tax efficient way possible. 

That is estate planning—making a plan and decisions in advance, naming where you want your belongings to go after you die, and taking steps now to make carrying out your plan as easy as possible later. However, good estate planning is much more than that. It should also answer the following:

  • Who pays the bills if I become incapacitated before I die?
  • Include arrangements for disability income insurance to replace your income if you cannot work due to illness or injury, long-term care insurance to help pay for your care in case of an extended illness or injury, and life insurance to provide for your family at your death
  • Draft a buy/sell agreement.  This provides for the transfer of your business at your retirement, disability, incapacity, or death
  • Select a guardian for your minor children’s care and inheritance.  This ensures crazy Aunt Sally won’t be caring for the children.
  • Provide for family members with special needs without disqualifying them from government benefits.
  • Most importantly, estate planning is a continuous process, not a one-time event. You should review and update your plan as your family and financial circumstances change over your lifetime.
You’re never too Young for Estate Planning

Young adults seem to think they’ll live forever.  Estate Planning is not just for retirees, although people do tend to think about it more as they get older. Unfortunately, we cannot predict how long we will live. Illness and accidents can strike at any age.

Estate planning is not just for the wealthy either, although people who have accumulated wealth may think more about how to preserve it. Good estate planning is often more impactful for families with modest assets because the loss of time and funds as a result of poor estate planning is more detrimental.

Your State Has a Plan for You

If you die without a valid estate plan, any assets owned in your individual name and without a beneficiary designation or other governing contract will be distributed according to your state’s intestacy laws, typically through a court-supervised probate proceeding. In many states, if you are married and have children, your spouse and children will each receive a share, even if your children are from a prior marriage or no longer minors. That means your spouse could receive only a fraction of your estate, which may not be enough to live on. If you have minor children, the court will control their inheritance. If both parents die (e.g., in a car accident), the court will appoint a guardian without knowing whom you would have chosen.  The crazy Aunt Sally scenario again.

An Estate Plan Begins with a Will or Living Trust

A will provides your instructions, but it does not avoid probate. A will only directs how assets titled in your name and without a beneficiary designation or other governing contract will be distributed. The assets must still go through your state’s probate court before they can be distributed to your intended beneficiaries. The process varies greatly from state to state, but it can become expensive with attorney’s fees, executor commissions, and court costs. It can also take anywhere from a few months to two years or longer. In most cases probate proceedings are open to the public, and your creditors and any excluded heirs are notified of their opportunity to file for payment of a debt or a share of your estate. In short, the court system, not your family, controls the process.

Operation of Law

Not everything you own will go through probate. Jointly-owned property and assets that let you designate a beneficiary (for example, life insurance, IRAs, 401(k)s, annuities, and certain other accounts) are not controlled by your will and usually will transfer to the surviving owners or beneficiary without probate. However, joint ownership of assets can create problems and using this method for estate planning solely, is not a good idea. In addition, avoidance of probate is not guaranteed. For example, if a valid beneficiary is not named, the assets will have to go through probate and will be distributed along with the rest of your estate. If you name a minor as a beneficiary, the court will probably require a guardianship until the child reaches the legal age of majority for the state, often between eighteen and twenty-one years of age.

A Trust is Often the Best Choice

For these reasons, a revocable living trust (combined with a pour-over will) is the preferred choice by many families and estate planning professionals. Establishing and funding a revocable living trust can avoid probate at death, prevent court control of assets if you become incapacitated during life, bring all of your assets together into one plan, and provide increased privacy. Because the trust is revocable, it can be changed by you at any time. The accompanying pour-over will is a backup measure in the event that any assets are not funded into your trust during your lifetime and provides that those assets should be poured over into your trust upon your death.

Unlike a probate a trust can continue long after your death. Assets can stay in your trust, managed by the trustee you selected, until your beneficiaries reach the age you want them to inherit or longer. 

Planning Your Estate Can Help You Organize Your Records and Correct Titles and Beneficiary Designations

Planning your estate now will help you locate and organize your information and documents, as well as find and correct errors that may have been overlooked.

Often people do not give much thought to titles and beneficiary designations. Unintended innocent errors can create problems for your family at your incapacity or death. Beneficiary designations are often out-of-date or otherwise invalid. Selecting the wrong beneficiary on Retirement and other tax-deferred plans can lead to devastatingly expensive tax consequences. Correcting titles and beneficiary designations now can save time and taxes for your family later.

Estate Planning Does Not Have to Be Expensive

Pay now or pay later is a true adage when it comes to Estate Planning.  Being too cost conscious may have consequences that you did not intend. The assistance of an experienced estate planner will be able to provide critical guidance and peace of mind that your estate is prepared properly to meet your objectives.

No Time Like the Present to Plan Your Estate

No one likes to think about their own mortality. S, this is precisely why many families are unprepared when incapacity or death strikes. Waiting is not an option. You can put something in place now and change it later—which is exactly the way estate planning should be done.

Help Protect the Ones you Love the Most

Having a properly prepared plan in place  will protect your family and give you  peace of mind. Estate planning is one of the most thoughtful and considerate things you can do for your loved ones.

#Estate Planning #Trust #Wills #Power of Attorney

Theo L. Morson, JD


T.L. Morson and Associates, Pllc

COVID Round Three

COVID round three. And cases spike across the nation for the third time this year.  Cases continue to grow and state are struggling to provide care. Unfortunately, the spread this time is from coast to coast and far worse than the spikes experienced in the Spring and Summer.  With COVID round three close to 250,000 Americans have lost their lives to this deadly virus with that number expected to exceed 300,000 before all is said and done. The unprecedented loss of life is expected to exceed that of all the wars fought by this nation combined. Unfortunately, the worse is yet to come.

Exciting news from pharmaceutical giants Pfizer and Moderna about the development of vaccines that could start arriving as soon as December has provided a glimmer of hope for the nation.  This exciting news is tempered, however, by forecast that the vaccine will not be available to the vast majority of Americans until the late Spring, early Summer barring any delay in the distribution.  Some states have starting to institute restrictions in an effort to avoid shutdowns that have devastating economic and social effects.

Covid round three

Estate Planning Check-up

Now more than ever is the time to start or revisit your estate planning needs.  Estate Planning is more than just a Will or Trust.  Estate Planning is a comprehensive plan that evaluates all aspects of your Estate, Tax, Life Insurance, and succession planning needs.  Failing to plan in one area can have dire consequences in others. An Estate plan is not for the living, it’s for the ones we leave behind.

At T.L. Morson and Associates, with over 25 years of experience, we are uniquely qualified to handle all aspects of your Estate Planning needs.  Life can change in the blink of an eye, call today for your free consultation.

Follow Us on Facebook

Change with The Times

Life can and often does change in the blink of an eye.  Whether you’re planning a wedding of starting your family it’s essential that your Estate Plan change with your life.  So, if you’ve recently married, divorced, started a new business, or purchased your dream home, reviewing your Estate Plan today can save your loved one’s time and money tomorrow.

So, Estate planning is not just for the wealthy. Good estate planning is often more impactful for families with modest assets because the loss of time and money as a result of poor estate planning is more detrimental.

A will provides your instructions, but it does not avoid probate and will only direct how your assets are devised. The assets must still go through your state’s probate court before they can be distributed to your intended beneficiaries. The process varies greatly from state to state, but it can become expensive with attorney’s fees, executor commissions, and court costs. It can also take anywhere from a few months to two years or longer. In most cases probate proceedings are open to the public, and your creditors and any excluded heirs are notified of their opportunity to file for payment of a debt or a share of your estate. In short, the court system, not your family, controls the process.


Call today to schedule a free consultation

Follow Us on Facebook

Call for your review Today!

Trust of Will ?

Estate Planning Document

Deciding whether to draft a Trust or a Will is an individual decision and should be made on a case by case basis with an Estate Planning expert.  Here are some facts about both Trust and Wills that may help make your decision a bit easier.

Compare and Contrast

Yes, most of my clients with larger estates select a Trust over a Will as part of a complete estate plan. Wills, however, can be an excellent fit for the right client.  Some of the reasons include:

  • Trusts bypass probate.  Probating an estate is not as expensive as some people make it out to be.  The overall cost varies greatly depending on the jurisdiction, size, claims, and whether challenges are made.  Drafting a Trust allows you to select successor trustees, either individuals or corporate to carry out the terms of your Trust.
  • Trusts are not public.  Probate is a public process.
  • Wills are used to devise an estate.
  • Trusts also devise an estate; however, Trusts provide the Grantor greater flexibility and control.  Trust give the Grantor has the ability to “pull strings” from the grave. This means the Grantor may set terms as to how assets are devised to their beneficiaries.  For example, the Grantor may state that 50% of a beneficiary’s inheritance is payable immediately and the remaining 50% is payable after she graduates from college.
  • Trust are used for Estate tax planning for larger estates.
  • Size matters – for individuals with smaller estates a simple Will may do the trick.  Establishing Transfer of Death Agreements for bank and brokerage accounts allow assets to transfer by operation of law to beneficiaries thus bypassing the probate process.
  • Cost – the cost of drafting a Trust can be more than twice that of drafting a Will.  Though drafting a Trust is more expensive upfront, the added cost of probating a Will could significantly reduce the cost difference.

Follow Us on Facebook

Call for your free consultation

What COVID -19 has Taught US

What COVID -19 has Taught Us About Estate Planning? So, as the COVID-19 Pandemic sweeps its way across the United States, over 50% of all Americans still do not have an estate plan. This has struck a resounding alarm.  But, most people recognize the importance of planning their estate. However, most people also believe that they have plenty of time and that estate planning is something that they should do much later in life.  But, the fact is that estate planning is relevant at all stages of adult life, regardless of age.


An estate plan is not just for the living,  an estate plan is mainly for the loved ones we leave behind.  Dying without a Will or Trust means that you have left important decisions for the court to decide which may be contrary to your personal wishes.  Who will care for your children? Where will they live? How will their college needs be met?  These are all questions that a complete estate and financial plan can help address.

Tomorrow is not promised to any of us.  An estate plan can range from simple to quite complex depending on your particular circumstances.  The average estate plan can cost from $500 – $2,000 and can be completed in as little as a week. A comprehensive Estate Plan will include a Trust, Will, Powers of Attorney for health and finances, HIPPA agreement and more. All plans are tailored to your specific needs.  Life can change in just the blink of an eye. Don’t leave your loved ones unprotected. So, What COVID -19 has Taught Us About Estate Planning? Take care of the ones you love the most. Call Today to schedule your free no obligation consultation.

Follow Us on Facebook

Take care of the ones you love the most

For the ones you love

In the Blink of an eye life can change forever. Estate Planning is not only for you, An Estate Plan is more for the ones we leave behind. Take care of the ones you love the most.

However, we know two things are certain; death and taxes.  Despite these uncertainties, over 50% of people fail to plan for the inevitable. Because of this failure, a countless number of estates find themselves in the time consuming, expensive, and public process known as Probate.

Estate Plan is one of the most important and thoughtful decisions you can make. The purpose of an Estate Plan is not just to tell the government how to distribute property after your death. An Estate Plan is a way to maintain control over your affairs while alive and after you pass away. So, an Estate Plan allows you to protect your assets and help you and your family maintain your current lifestyle.

The amount of planning required will vary from client to client.  The objective of any Estate Plan is to transfer wealth to the next generation in the most tax efficient way possible.

At T.L. Morson and Associates we specialize in Estate Plans and Wealth Transfer Plans that are customized to meet the needs of each client.  This means our plans are designed specifically for you and the needs of your family.

Take care of the ones you love the most. Call Today for your free no obligation consultation.

Follow Us on Facebook

The Time to Act is Now!

April 24, 2020

The Time to Act is Now!

The time to act is now. We hope this post finds you and your family staying home and staying safe.  It’s amazing how fast times can change in such a short period of time. Thousands of Americans have tragically loss their lives in just the past few months from Covid-19 virus. Michigan is one of the hardest hit states in the country. The nation is being tested and there is no end in sight.

50%of Americans are Unprepared

Times like this that remind us of the need to prepare for what will eventually happen to all of us, death and taxes.    A recent study conducted by Merrill Lynch found nearly half of all American’s over the age of 55 still do not have a Will.  To make matters worse, only 18 percent of people in that age range have all of the recommended legacy plan essentials: a will, a health care directive, and durable power of attorney.

Often times when the topic of estate planning comes up people often think that they cannot afford an estate plan or that a Will is more than enough to satisfy their needs.  However, two of the most essential pieces to a complete estate plan are a health care directive and durable power of attorney.  A Power of Attorney is essential if you become ill and unable to make medical and financial decisions. 

T.L. Morson and Associates provides a full range of estate planning services. Our services include Wills, Trust, Powers of Attorney for Health, and Durable Powers of Attorney.  Documents do not complete an effective estate plan.  Advice and experience does.  Contact us for your free consultation.

Follow Us on Facebook