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A trust is "funded" when it assumes ownership of your property, and a properly "funded" trust avoids probate. Transferring ownership of your property to a trust means you no longer "own" those assets. The trust is now the owner, so when you die you do not "own" anything, avoiding the probate process.


"Funding" is the transferring of asset ownership from you to your trust, either during your life or at the moment of your death. This is accomplished in most cases by a simple "assignment" statement. For real property and property that has "title," you must deed the property from your name to the name of your trust.


Trusts can also be funded with financial assets, such as life insurance and mutual funds, by naming the trust as the beneficiary to these assets.


For more information about other options on avoiding probate, such as a living trust or lady bird deeds, contact us for a FREE consultation.

At Swogger, Bruce & Millar Law Firm, we pride ourselves in listening to you, understanding your goals, and helping you prepare an estate plan that is clear, understandable, and effective.


Our objective is to prepare your estate plan so that you decide exactly where you want your assets distributed after you pass away. To assist you in understanding the purposes and benefits of estate planning, please read these commonly asked questions and answers about planning your estate with us.

What is estate planning?

Estate planning identifies all of the property you own and how you want those assets distributed upon your death. These assets include real estate, personal property, bank accounts, investments, retirement accounts, and business interests. The estate plan is a document — such as a will, or a trust — that provides instructions on the distribution of your assets. In the case that you die without a will or a trust, the state will likely dictate and control the distribution of your assets.

What is probate?

Probate is the legal process for distributing your property and assets. The process involves the probate court validating your will, appointing the personal representative to administer your will, and determining how assets are to be distributed if there is no will when you die. The probate court also resolves disputes and contests that may arise among the beneficiaries to your will, such as family members.


Probate is not necessary for property and assets you don't own. Probate is not necessary for joint assets, life insurance proceeds, annuity proceeds, or certain retirement benefits. These usually pass to the named beneficiary.

What is a will?

A will is a legal document that instructs how a person's probated estate is to be distributed upon their death.

Does a will avoid probate?

No. A will provides instructions to the probate court on how to distribute your assets through the probate process. Factors that control whether probate is necessary usually deal with how a title for an asset or property is held or how the asset is transferred after your death. Your will determines who manages your estate at your death, who receives your assets, and who is appointed as the guardian for your children.

What is a trust?

Like a will, a trust is a legal document that instructs how your assets are distributed when you die. A trust may specify terms and conditions that beneficiaries must meet before they receive the stated assets. A trust is a living document that can provide income and principal to you and your spouse while you are alive, as well as other people you designate.

What does it mean to "fund" a trust?

Does a will or a trust avoid estate tax?

Wills by themselves do not avoid taxes. Other than a probate inventory fee, there are no taxes on estates unless the value exceeds the taxable exemption, which is currently $5,000,000 per person.


Certain types of trust can be used to save and/or eliminate taxes. Certain property drafted trusts can save you on taxes, and trusts can help married couples stay under the allowable exemption limit. These are known as credit-shelter trusts.

Why do I need an estate plan if I don't have a lot of assets?

Owning a large amount of property is rarely the main reason to plan your estate. The main reason is to provide clear and effective instructions to ensure that your assets are properly distributed upon your death. Along with providing peace of mind, estate plans significantly reduce the chances of family fighting and litigation over your assets.

Is avoiding probate the most important reason to have an estate plan?

No. Probate courts in the Northern Michigan area are effective and efficient in seeing that your assets are properly distributed. Your estate plan should center on your individual and family circumstances. We work closely with you to determine whether a will or a trust is the best option for you.

Who will take care of my children if I cannot?

One of the most important aspects of your estate planning is determining a guardian for your children who will be responsible for their daily care, as well as a conservator who will be responsible for managing the financial resources left to the children.

What happens if I become mentally incompetent, or for some other reason I am no longer able to manage my finances or make my own medical decisions?

Your estate plan should include a durable power of attorney and a health care power of attorney. The durable power of attorney is the person you select to handle your legal and financial activities of daily living in the event you are unable to perform those functions due to a physical or mental condition or impairment. The health care power of attorney is the person you select to enforce your medical decisions in the event you are unable to perform those functions.

Contact Michael Swogger or Heather Bruce today for a FREE initial consultation of your estate planning needs. We are here to listen, advise, and provide you with peace of mind regarding your legal needs.

Frequently asked questions about estate planning

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