How do I fund a trust?

In Washington, the process of funding a trust depends on the type of trust being established. The most common trusts are revocable trusts and irrevocable trusts. For a revocable trust, the trustor (the person creating the trust) will transfer existing assets into the trust. This means that ownership is transferred from the trustor to the trust. The trustor may also transfer future assets into the trust, such as an inheritance or expected payment from an insurance policy. For an irrevocable trust, the trustor must transfer all assets into the trust, and the trustor cannot take them back out of the trust. This means that the trustor gives up all control over these assets and that the trust becomes the legal owner. It is important to note that for this type of trust, the trustor must also provide a funding source, such as a life insurance policy, to provide the trust with funds in the event of the trustor’s death. There are also other types of trusts, such as spendthrift trusts, that may require additional funding sources, such as a charitable trust that uses a donor-advised fund. It is important to review the terms of the trust and consult with an attorney to ensure that all funding requirements are met.

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