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