Estate planning is a crucial step in securing the financial future of your loved ones. Among the various tools available, a Revocable Living Trust stands out as one of the most effective ways to manage and protect your assets. This type of trust allows your heirs to bypass the often lengthy and costly probate process, ensuring that asset management proceeds smoothly, even in the event of your incapacitation. However, simply establishing a Revocable Living Trust is not enough; it must be properly funded to serve its intended purpose.
Creating an estate plan, including a Revocable Living Trust, involves careful consideration and planning. Unfortunately, many families make the mistake of failing to fund their trust adequately. This oversight can render the trust ineffective, as assets outside the trust remain subject to probate. Even if your will specifies that all assets should pour over into your trust, this only happens after probate, negating the trust’s primary benefits.
Common Pitfalls in Trust Funding
When it comes to funding a trust, several common pitfalls can create significant hurdles. One frequent mistake is failing to include certain assets in the trust. These might seem minor but could lead to complex legal issues if not addressed. Another common oversight is not designating the trust as the beneficiary for life insurance policies or retirement accounts. If these assets are not directed into the trust, they may bypass it entirely, exposing them to probate.
Additionally, assets held in joint tenancy with rights of survivorship will automatically transfer to the surviving joint tenant rather than the trust. Moreover, assets solely in your name will only enter the trust after undergoing the probate process, which can take several months to over a year.
Important Assets for Review and Titling
To ensure your trust is properly funded, a thorough review of all your assets is essential. Consider the following types of assets for potential inclusion in your trust:
- Bank Accounts: Ensure both checking and savings accounts are titled in the trust’s name.
- Certificates of Deposit: These should be reviewed and possibly retitled to the trust.
- Investment Accounts: Transfer ownership to the trust to keep these assets protected.
- Retirement Accounts: While these cannot be titled in a trust, ensure the trust is named as a beneficiary if appropriate.
- Stocks and Bonds: Any held in certificate form should be retitled to the trust.
- Real Property: Deed your real estate holdings to the trust to avoid probate.
- Tangible Personal Property: Items like art, jewelry, and vehicles may also be included.
- Promissory Notes: These should be reviewed for potential inclusion.
- Closely-held Business Interests: Consider transferring these interests to your trust for efficient management and distribution.
How Safe Harbor Law Firm Can Assist You
Navigating the complexities of estate planning and trust funding can be overwhelming, but you don’t have to do it alone. At Safe Harbor Law Firm, we specialize in helping clients like you ensure that your estate plan is both comprehensive and effective. Our experienced attorneys will guide you through the process of reviewing your assets, changing titles as necessary, and ensuring your trust is fully funded to meet your estate planning goals.
We offer a personalized approach, taking the time to understand your unique situation and tailoring our services to fit your needs. With our guidance, you can rest assured that your estate plan will function as intended, safeguarding your legacy for future generations.
Contact Us Today
Don’t leave the future of your estate to chance. Reach out to Safe Harbor Law Firm today for personalized assistance with your estate planning needs. Let us help ensure that your Revocable Living Trust is properly funded, so you can have peace of mind knowing your family’s future is secure.