FUNDING

Summary

Funding is the legal process of transferring ownership of assets (property, money, investments, etc.) from an individual to a trust they have created. This is a crucial step that makes the trust operational - without funding, a trust is just an empty legal document. The person creating the trust (grantor/settlor) must formally change the title or ownership of their assets to be held 'in the name of the trust' rather than in their personal name.

Usage Context

Essential when studying estate planning, trust administration, and understanding how trusts become legally effective and operational

Common Confusions

• Thinking that creating a trust document automatically includes their assets
• Believing that funding means the trust needs money when it can hold any type of property
• Confusing funding with the initial trust creation process
• Not understanding that unfunded trusts provide no benefits