You’ve taken the time to plan for the financial well-being of your loved ones and yourself. You’ve created a customized estate plan to address your goals and concerns. Your plan includes one of the most powerful estate planning tools out there, the Revocable Living Trust, which allows your heirs to avoid probate upon your death and provide for management of your assets without interference from the court should you become disabled or otherwise incapacitated.
All is well and good—unless you have not taken the steps necessary to fund your trust. Without proper funding, your trust is worth no more than the paper it is written on.
It’s hard to believe, but many families take the time to create a comprehensive estate plan, together with a Revocable Living Trust, then fail to properly fund the trust. And even though a Will may provide that all assets pour over into your trust for further disposition, this takes place only after said assets pass through probate, thereby negating one of the primary benefits of creating the trust in the first place.
Another important factor to consider is that assets such as life insurance, individual retirement accounts and pension plans pass to designated beneficiaries. If the trust is not named as the beneficiary of such assets, they will not be held (and protected) by the trust. Likewise, assets held in joint tenancy with rights of survivorship will go to the surviving joint tenant, not the trust. In addition, assets held in your name alone will not go to the trust until probate has been completed, which can take several months, a year, and sometimes even longer.
Given all of this, it is extremely important for you to review all of your assets to determine which titles should be changed to your trust. Assets you will want to review, and possibly title to your trust, include all of the following:
Bank accounts
Certificates of deposit
Investment accounts
Retirement accounts
Stocks and bonds held in certificate form
Real property
Tangible personal property such as art, rugs, jewelry, vehicles, etc.
Promissory notes
Closely-held business interests
We can counsel you on the best strategies to employ so that your assets are correctly titled, and your trust properly funded to achieve your goals and ensure your wishes are carried out.
As part of our Estate Planning flat-fee, we do provide you with a Funding Table to help you title your assets correctly into your new trust.
Also, our Maintenance Program includes further assistance in funding your trust, and an annual review of your Estate Plan. If you are unsure if you are in our Maintenance Program, or have questions regarding Estate Planning, please contact us. We’re always here to help.