You Have a Revocable Trust, Now What?
Many individuals who execute Estate Planning believe that the execution
of such documents is the end of the process. What most individuals fail
to realize is the importance of funding or transferring their assets into
their respective Trusts as soon as possible after the Estate Planning
documents are effective. Some transfers occur during such individual’s
lifetime and other transfers occur at death. The most important part of
Estate Planning is making sure each asset is accounted for and is either
transferred into a Revocable Trust during lifetime or has a beneficiary
designation transferring said asset into a Revocable Trust at death. It
is also extremely important to note that assets in a Revocable Trust are
not protected from your creditors during your lifetime. You must integrate
your Estate Planning with a proper Asset Protection Plan.
Each type of asset has its own legal method for being transferred or funded
into a Revocable Trust. For example, banking and brokerage accounts can
be re-titled in the name of a Living Trust by providing the financial
institution managing said account with a copy of the Trust Agreement and
proper instructions to facilitate said transfer. This is oftentimes the
best option because not all banks allow a Revocable Trust to be a Payable
on Death or Transfer on Death beneficiary of a banking or brokerage account.
Life insurance, annuities and all retirement accounts are usually transferred
at death by naming the Revocable Trust as the Beneficiary on any such
policies. This is also accomplished by giving the custodian or financial
institution managing such life insurance, annuity and/or retirement Account,
as the case may be, a copy of the Trust Agreement with directions that
the Revocable Trust should be added a beneficiary. Real property, on the
other hand, is usually transferred during lifetime. A deed transferring
each parcel of real property should be executed at the same time the Estate
Planning documents are executed. Similarly, businesses should be transferred
during lifetime pursuant to an Assignment, which is a legal document indicating
the Trust as the new owner of each respective business. Assignments are
also recommended to be executed at the same time as the Estate Planning
documents. Failure to fund a Revocable Trust can lead to extreme hardship
for family members and/or friends who are administering your Trust and/or
Estate due to the necessity of a Probate or Court Approval to facilitate
such transfers after death.
However, transferring assets into your Revocable Trust during your lifetime
may not be the best option, as these assets are still subject to your
creditors. Revocable Trusts are great Estate Planning tools, but you should
incorporate other Asset Protection tools that will protect your assets today.
Contact The Presser Law Firm, P.A. for a complimentary consultation to
learn more about Asset Protection, Business Law, Estate Planning, and/or
any other legal needs that you may have.
The Presser Law Firm, P.A.
6199 N. Federal Highway, Boca Raton FL 33487
(561) 953-1050 or e-mail Info@AssetProtectionAttorneys.com