One of our favorite estate planning tools is a revocable living trust (referred to in this post as a “trust”).
Because, unlike a Last Will and Testament (“Will”) (another essential estate planning tool you must have), which must be probated and only comes into effect after your death, a trust can help avoid probate. Plus, it allows you to control your assets while you are still living and even if you should become incapacitated. Moreover, a trust controls your assets after your death. So, there’s plenty to like when in comes to trusts.
We particularly like them because they are a flexible estate planning tool.
When you set up the trust with the help of experienced estate and probate counsel, you wear several hats. First, as the maker of the trust, you are considered the “Trustmaker” “Grantor” or “Settlor.”
That means you get to design the terms of the Trust.
This allows each trust to be customized to fit every individual’s specific situation as well as the particular needs of his or her family.
During your lifetime, you are also the initial “trustee” (or co-trustee) of the trust. As trustee of the trust, you are in charge of carrying out the trust’s terms.
Because the trust holds your assets for your benefit during your life and then distributes them according to your wishes after your death, during your lifetime, you are also the “lifetime beneficiary” of the trust. Thus, you have full access to the trust’s assets (principal and income) during your lifetime.
While this may sound a bit complicated, the bottom line is that having a living trust allows you to avoid probate while still controlling all of your assets during your lifetime.
Setting up a trust is simple when you have experienced counsel to assist you.
But there is more to setting up a viable trust than simply completing the paperwork.
After the trust is created, there is one more thing you have to do.
Fund the Trust.
Once the Trust has been created on paper, you need to fund it.
Because if you don’t, your assets may still pass through probate!
What? But, you say, I thought that was the whole point of having a Trust— to avoid probate.
Unfortunately, merely having a written trust doesn’t automatically avoid probate.
You see, at your death, unless your assets are in the name of a beneficiary, or are jointly owned, or are titled in a trust, they will pass through probate.
To avoid that and gain the full protection and benefit of having a trust in the first place, you need to “fund” your trust with your assets.
Funding a trust simply means transferring assets that are currently held in your name, whether individually or jointly with someone else, into the trust.
It means that during your lifetime, you will probably need to re-title certain assets into your trust (such as real estate and maybe even some financial accounts). And there may be other assets that you may want to name your trust as the beneficiary on. For example, financial accounts, life insurance and even retirement accounts.
Funding your trust is critical. You should always discuss your specific circumstances with your lawyer, but please, don’t skip this critical step.
Protecting Your Family is Just a Phone Call Away.
Don’t leave planning for your future and that of your loved ones to chance. All it takes is one phone call to the Law Offices of Samantha J. Fitzgerald to ensure that your wishes will be followed, and your loved ones taken care of when you are gone. We expertly guide individuals through the complex probate process, and capably handle all aspects of the creation, administration, and settlement of trusts as well. When you work with the estate planning attorneys at the Law Offices of Samantha J. Fitzgerald, you get more than just an estate plan: you get peace of mind. Call us at 954-580-3690 or email us at: [email protected] today.