Funding your Trust

After your Trust is signed, you must take steps to fund it with your Trust Property.  If you do not fund the Trust with your Trust Property, the Trust may not be effective, and your estate may have to go through probate upon your death.

To fund your Trust, you need to transfer property to the Trust. Any asset that is not transferred to the Trust is not owned by the Trust and therefore is generally subject to probate.  Some people decide to go through the process of transferring all of their assets of any type to their trusts. Many others decide to select certain assets to transfer to their trust and leave the balance of their assets to be transferred upon death to the selected beneficiary or go through probate.

How to fund a trust varies depending upon the nature of the property you want to transfer to your Trust.  Your Islamic Trust-based estate plan includes a Trust Funding Guide that will introduce you to the process of transferring assets to your Islamic Trust as well as give you some sample documents to get you started.

No matter what type of asset you’re transferring, however, take special note of the name of your Islamic Trust.

Your Trust document includes a statement identifying the name of the trust and the designation to be used for the transfer of title to the Trust, such as:

_____(Name)______, Trustee, or his/her successor in trust, under the _____(Name)______ Living Trust.”

The official name of your Trust will be used on deeds, certificates of title, and assignment of interest documents, as well as on beneficiary designations.

You are free to add additional assets to your Trust (or remove assets from your Trust) after it has been signed.  To memorialize any changes to assets, update your Schedule of Trust Property by adding another page containing the additional assets.  A sample form of an “Update to Schedule of Trust Property” is included in your Trust Funding Guide, which is a part of your Islamic Trust-based Estate Plan.  Of course, retitling the assets is the most important part.  Check out your Trust Funding Guide or our Halaqa blog for more information on transferring different types of assets to your Trust.

After your Islamic Trust or Islamic Family Waqf has been signed, notarized, and funded, any future assets may be transferred to the Trust freely.  When purchasing a new home, you may be able to title the home directly to the Trust.  Likewise, when opening a new bank account, you may be able to directly open it in the name of the Trust.  By doing this, you will ensure your Trust remains funded and the terms of the Trust apply to all future assets.