A revocable living trust only works as intended when assets are properly transferred into it. Many Tennessee residents create a trust but fail to include some of their most important assets.
This oversight can lead to probate and delays that the trust was designed to avoid. Proper funding helps people maintain control and reduces complications.
Why funding matters
A revocable living trust must hold legal title to assets before it can manage or distribute them. Tennessee requires probate for property that remains in an individual name or is left out of a trust. This often surprises families who believed the trust covered everything. Careful funding and retitling of assets helps ensure that the trust controls the property during life and after death.
Common funding mistakes
To help prevent missteps, here are some funding errors to avoid:
- Leaving real estate in an individual name
- Failing to update financial accounts
- Overlooking beneficiary designations
- Ignoring vehicles or business interests
Being excluded from the trust forces overlooked assets through probate, a complex and time-consuming process.
Retitling assets correctly
To retitle assets, you must follow precise steps that vary by asset type:
- Real estate typically needs a new deed transferring ownership to the trust.
- Financial institutions often require specific forms to change account titles.
- Beneficiary designations must be updated when the trust is intended to receive certain assets.
- Vehicles may need new titles issued through Tennessee agencies.
The proper execution and recording of deeds for real property transfers is also required. Taking a methodical approach with experienced guidance can help ensure that every asset is addressed when funding a revocable living trust.