Finishing the Process – Entities and Trusts are Only as Good as Their Funding

 by Jeff Waddell

It happens. Clients get motivated to finally do their planning, be it for estate planning, corporate or asset protection purposes, and just when we get their new limited liability company (“LLC”) or trust established they thank us, pay the bill and disappear. Discussions have been had and memos follow advising the client that the trust needs to be funded or the real estate needed to be deeded to the LLC. The client assures us that they are handling it, but nothing happens.

Time, energy and money may have effectively been wasted. The situation is potentially uncomfortable if something goes wrong before the problem gets fixed. Who is responsible?  What obligation does the attorney have to see that the planning he or she has done is properly funded to provide the client with the benefit they initially sought? The answers to these questions vary from jurisdiction to jurisdiction and fact pattern to fact pattern, but it never needed to come to this in the first place.

Communication with the client from the outset of the engagement is imperative to stress that the job is not done until the funding is complete. Gathering the documentation (i.e. deeds, stock certificates, etc.) as you go through the entity or trust creation phase so that it can be discussed in person at the signing is a good step. The optimal situation would be to have the client authorize the attorney to prepare the documents to make the transfers and sign those documents mere moments after the entity is created.

Remember until the titling of the asset has changed the protection an entity can provide is not in place. Find ways to finish with a flourish.

Explore posts in the same categories: Asset Protection, Estate Planning

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