Friday, August 12, 2011

Please Fund Your Trusts!

It is important to note that trusts only have power over property that is put into them.  Anything put into the trust will then be controlled by the trustee.  In a revocable trust, the grantor typically will be the trustee while he/she has capacity and while he/she is alive.  The trust should set forth provisions that discuss what will happen during period of incapacity, which should be to have a successor trustee step in.  The trust document specifies how a determination of incapacity is made, such as by the opinion of two doctors.  The trust will not have any power over property outside of the trust, and therefore it is a good practice to prepare deeds and other documents to transfer property into the trust when the trust is prepared.