On average, it takes about 2 to 4 weeks to get the revocable living trust in place; then, it takes another few weeks to 6 months to get the trust fully funded. This is a relaxed pace; if there is an emergency, such as a terminally ill client, the entire process can be sped up.
You and your family are protected the moment that you sign your living trust document. It is effective immediately. Funding takes longer.
Funding refers to the transfer of assets into your living trust or changing the beneficiary designation on life insurance, retirement accounts, and annuities. This can take awhile because you need to send out letters of instruction and fill out forms.
It’s important that you don’t take it for granted that an asset is funded, unless you receive written confirmation that the change in title and/or beneficiary designation has been made. Sometimes paperwork disappears.
Keep a list of all your assets, designating which assets have been funded. Keep proof of your funding in the same file with all your important documents.
Proof would include a change of beneficiary statement listing current beneficiaries or a quarterly financial statement from an investment, showing the name of your trust, not your name and not joint names with a spouse. You can likely look online to confirm funding of accounts.
Just keep a copy of your most recent statements. It’s important that your loved ones know of all of your assets because there are $32.9 billion in unclaimed assets; don’t let yours be among those.
In addition, funding is essential to an estate plan that works. Your trustee and trust only control those assets funded into your trust. This is extremely important if you become incapacitated and when you die.
If you have questions about setting up and funding a revocable living trust, consult with a qualified estate planning attorney.