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McCurrie McCurrie
& McCurrie, L.L.C.

680 Kearny Avenue
Kearny, NJ 07032-3010
Phone: (201) 467-4180
Fax: (201) 997-9567
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What if a New Jersey trust isn't funded?

Let's say you've created a trust. What do you do now? Well, one of the most important things is to actually fund the trust. Unfortunately, many people don't follow through with this crucial step, so the benefits of the trust ultimately aren't available for the settlor or the beneficiaries.

What New Jersey residents should remember is that a trust cannot control assets to which the trust doesn't have a title. That means the named trustee won't be able to control and distribute assets that are only listed in a will. If an adult child's parent is still alive, however, then the parent may still be able to fund the trust, but the proper legal steps need to be taken.

Those steps may include contacting brokers and banks to transfer assets into the trust.

A settlor's becoming somehow incapacitated is another issue that could arise around an unfunded trust. If an incapacitated settlor has granted power of attorney, then the person with power of attorney may fund the trust for the settlor.

If the settlor of a revocable trust has passed away, then the trust is probably irrevocable at this point, and the assets will likely have to be probated, either formally or informally.

When confronting any of these scenarios, it is a good idea to speak with an estate planning attorney with experience in protecting assets in a trust. A trust can be coordinated with a will to ensure that the settlor receives a stream of income and that the trust beneficiaries aren't hit too heavily with the estate tax.

Source: nwitimes.com, "ESTATE PLANNING: Mom didn't fund the trust," Christopher W. Yugo, Jan. 18, 2014

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