Creating a living trust involves forward thinking and planning. Decisions will need to be made, a thorough search for financial statements will occur, and a great deal of time and energy may be expended to arrive at the point at which your documents are ready to be signed. Accordingly, for your Estate Planning to be effective, it is crucial that assets be transferred into the Trusts established as part of your estate plan. Some assets will need to be re-titled into the Trust Name. Alternatively; other assets will be subsequently transferred by Payable on Death or Beneficiary Designations.
There are several reasons why the funding process is necessary. First, unfunded assets of the deceased are subject to the Probate process. This means the assets must be accounted for in the Estate paperwork and listed on the inventory subject to the Probate Court’s purview. Second, in the event of disability, the successor trustee is able to ensure that your wishes are carried out more effectively than relying on someone acting with a Power of Attorney. The Power of Attorney lapses upon your death, and there could be a disruption in implementation of your plan. In Estate planning, it is better to avoid joint ownership of assets with your children as it can upset or rearrange your carefully designed plan.
Re-titled assets include the following:
Checking Accounts, Savings Accounts, Money Market Accounts, Certificates of Deposit.
Securities: to include Stocks, Bonds, Mutual Funds, and Brokerage Accounts
Real Estate: to include the primary residence, vacation homes, and time shares
Re-titling accounts may be as simple as changing the account name to the Trust name after providing a Certificate of Trust to the bank. Other banks may require a new account application in the name of the Trust as well as the entire Trust document for their legal department to review, as well as completion of the bank’s supplemental documents.
Beneficiary Designations include the following: Life Insurance Policies, IRA’s, Annuities, 401(k), 403(b), Other Retirement Accounts
Change of Beneficiary or Payable on Death Accounts will typically require Change of Beneficiary for each account. They may also request Certification of Trust or full Trust documents.