If you have already taken the step to establish a living trust – congratulations! You’ve done one of the best things to make it easier for your heirs to administer your estate. Trusts are great choices for those who want to avoid probate, for blended families, for people who own property in more than one state, for those with privacy concerns, and for those with incapacity issues. For the trust to work properly, however, you must ensure that your assets are retitled in the name of the trust or properly coordinated with your trust. This retitling process is generally referred to as “funding” the trust. Below are a few frequently owned items that should be addressed in the funding process:
1. Real Estate
You need to make sure that the deed to your property has been titled in the name of your trust. Without this key step, your signature will be required to transfer title, and if you’re not here to provide that signature, your family will end up in probate court.
2. Bank and Investment Accounts
You need to ensure that your accounts are retitled in the name of your trust. If you would rather not take the step of renaming your account or opening a new trust-owned account, you can also name the Trust as the Payable on Death Beneficiary to ensure that account funds flow to the Trust without the probate court’s intervention.
If you’ve opened up any new accounts since you first established your trust, be sure to update these as necessary to achieve the goals of your trust.
3. Retirement Accounts
Your trust should not own these types of accounts during your life, but you can update the beneficiary designations on these accounts to coordinate with your trust and achieve your overall distribution plan, without the necessity of probate.
4. Life Insurance Policies
Like retirement accounts, you most likely will not transfer ownership of these policies to your trust, but you should coordinate the beneficiary designations to name the trust.
5. Business Interests
Generally speaking, you can assign your interest in companies to your trust, but this request must be customized based upon the instructions that exist in the By-Laws or Operating Agreement of the company. A review of company documents is necessary to determine what steps to take.
Regardless of the type of asset, a review of each of all of your assets must be part of the estate planning conversation so that you can decide how to address each one to meet your goals.
To learn more about trusts, wills, powers of attorney, health-care directives and other considerations when planning your estate, please join Solak Legal’s next FREE online event, “Estate Planning 101,” on Wednesday, April 21st at 4:30. A replay will be provided to all registered participants. Email Jennifer@solaklegal.com to register.
The information in this column, which was sponsored by Solak Legal as part of The Leader Expert Series, is intended to provide a general understanding of the law and not legal advice. Readers with legal questions should consult attorneys for advice on their particular circumstances. Jennifer Solak provides legal advice for families and businesses and may be contacted at firstname.lastname@example.org or 713-588-5744.