A story of love and loss, of isolation and loneliness
A Trust means that they will not have to go through Probate, which can be a long and expensive process at what undoubtedly will be a painful time for your family. Yet an estimated 50% of Americans do not create a Trust. Others make mistakes that have disappointing consequences for the beneficiaries.
This can be confusing. Funding is the process of transferring ownership of your assets from you to your Trust. To do this, you physically change the titles from your individual name(s) to the name of your Trust. Your Trust can only control the assets you put into it. Make a list of your assets, which can include bank and brokerage accounts, fine art and antiques, real estate, intellectual property, savings accounts and vehicles.
If a property is in your name, you will change the name to that of the Trust. Owning property in different states does not necessitate having a separate legal document; you can include it in your Trust. A heads-up—if you do a refi, you will need to move the title out of the Trust, then move it back into the Trust.
What’s missing from your Trust are retirement accounts, annuities, 401k’s and life insurance policies. These do not belong in your Trust. For these accounts, you will name beneficiary designations that will supersede whatever designation you may have identified in your Trust.
For the accounts that do not go into your Trust, this example illustrates just how important it is to update the beneficiary designation. One of our clients went through a bitter divorce. When he remarried, he was careful to update his Trust. What he forgot to update? His life insurance policy and the 401k that still named his ex-wife as the beneficiary. If something had happened to him, it was his ex-wife—not his new wife—who would have been the beneficiary
We see this happen regularly. Uncle Joe promises an inheritance to his favorite nephew Todd. This inheritance is significant enough that it will help pay for his college education, to the relief of his parents—they’re counting on this as part of their own financial planning. When Uncle Joe dies, however, there’s no mention anywhere of this commitment. If you intend to leave something to a loved one, make sure this is included in your Will or Living Trust. If a friend or family member keeps promising to will you something, encourage that person to get it in writing.
Keep your Trust updated with life events such as births, deaths, divorces or investments. I like to think of this as any life change that will affect an inheritance. Also review beneficiary designations on retirement accounts and life insurance policies. Relationships and alliances change. Periodically review all of these documents to make sure your estate plan truly reflects your wishes.
Guideway prepares a bound document of your Trust. We also provide a copy of your Trust as a pdf file. Keep these in a safe place in your home or office. We suggest that you share the location of these files with a trusted friend or family member. Unlike other legal documents, a Trust doesn’t get filed with the court or county. If you can’t find it, it doesn’t exist.
Planning for the future is vital to ensure that you and your family are protected and prepared throughout your later years and beyond.
We are delighted to be offering in-person appointments again! For those who prefer the convenience of Zoom, we can accommodate that as well. Our Trust package includes a Power of Attorney, an Advance Healthcare Directive and a Pour Over Will. Best of all, we guide you through it and we prepare the legal documents.
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