mesa-mgl36e-gun-rifle-safe-open-empty-02As you tidy things up around the house, be sure to also check on the status of your estate planning to ensure that it is in order.  This includes verifying that the assets your trust is designed to protect are actually “funded” into your trust.  Always remember that an empty trust is a worthless trust.  To illustrate this principle, consider the following hypothetical:

There was once a person of great wealth who desired to protect his many valuable possessions, including priceless jewels, precious metals and other items of inestimable worth.  This man retained the world’s leading security expert to design and build a highly secure structure that would safeguard all of the aforementioned valuables.  When this elaborate safe was finally completed, it was deemed to be the most advanced and most secure security structure ever built.  This wealthy individual took deserved pride in his new edifice—it was a marvel to all who beheld it.  He then slept peacefully from that time forward, believing that he and his wealth were fully protected from all dangers.  Sadly, no one ever bothered to put any of the valuable assets into the security structure.  This sounds silly, if not absurd, right?  Unfortunately, we encounter the real-life equivalent to this all too often in the world of estate planning.

As I review existing estate plans, one of the most frequent problems I encounter is an empty trust.  It is quite common for an attorney who has designed and implemented a trust to then instruct the client that he/she needs to “fund” the trust.  In other words, the attorney only builds the “safe” and it is left to the client to undertake the exercise of putting property into the safe.  While there are happy exceptions, the reality is that the vast majority of the time the client does not complete this all-important part of the process and the safe (i.e. the trust) remains empty.  An empty trust is a worthless trust.

The safest (pun intended) and best approach is to ensure that the attorney who designs and implements your trust also helps you get the relevant assets into said trust.  This process can be highly technical at times and unless the required legal formalities are observed, the assets the trust is designed to protect will remain outside of the trust and unprotected.