Is an unfunded trust still valid if need as a fall back to decide distribution?
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Is an unfunded trust still valid if need as a fall back to decide distribution?
A Florida resident has a brokerage account and home, both titled in his revocable trusts name. Later he decides to make both the brokerage account and home (POD) / (TOD). If for some reason the (POD) / (TOD) designation would be contested in court and fails, would the previous titling in the trusts name be used to decide how the assets are distributed, or does the trust fail because it is no longer funded. In other words, is this unfunded trust still valid if need as a fall back to decide distribution?
Asked on May 16, 2012 under Estate Planning, Florida
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
The trust that you have written about is a valid trust albeit it is not funded. If the trustor passes without the trust being funded, then the trust has no assets to be distributed. In such a circumstance the trustor's Will would control and if no Will, intestate succession where the State distributes the assets of the deceased to the people closest in blood relation would control.
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