Incorporating a Trust into your estate plan is a wise move, offering benefits like probate avoidance, privacy maintenance, and asset distribution according to your wishes, with potential lifelong protection for your loved ones. However, it's crucial to understand that merely creating a Trust isn't sufficient. For it to be effective, proper funding and periodic updates are essential.
Funding your Trust involves transferring ownership of assets from your name to the Trust's name, encompassing various assets like bank accounts, investments, real estate, and valuables. This ensures that your assets are managed as per your Trust's terms, facilitating their distribution according to your wishes in the event of death or incapacity.
Failing to fund your Trust renders it ineffective, leaving your assets unprotected and distributed contrary to your intentions, potentially necessitating a costly court process. To avoid such complications, seek assistance from an attorney who can ensure proper funding of your Trust.
Forgetting to update beneficiary designations on your accounts is another common mistake. Beneficiary designations override instructions in your Will or Trust, making it crucial to review and update them regularly. Collaborate with your lawyer to establish a plan for managing beneficiary designations and conduct annual reviews to ensure alignment with your estate plan.
Additionally, failing to deed your home into your Trust can lead to probate proceedings, resulting in unnecessary costs and delays. Work with an estate planning attorney who ensures all your assets, including your home, are properly transferred to your Trust.
Regularly reviewing your estate plan and accounts every three years is vital to ensure alignment and catch any oversights. By comparing financial accounts to your estate plan periodically, you can identify and rectify discrepancies, preventing assets from being excluded from your Trust.
By addressing these funding and maintenance aspects of your Trust, you can maximize its effectiveness and ensure that your estate plan functions as intended, providing protection and peace of mind for you and your loved ones.
Make Sure All of Your Assets Are Included In Your Plan with Help From Your Estate Planning Attorney
Getting your legal documents in place is an important step, but it's equally important to know that the documents themselves are not magic solutions (as magical as they may seem!). Merely creating a Trust or naming beneficiaries on your accounts does not guarantee that your wishes will be carried out unless all of the pieces of your plan are coordinated to work together.
If you aren’t experienced in the area of estate planning, trying to coordinate all these pieces yourself can be a recipe for disaster.
That’s why I work closely with my clients to not only create documents but to create a comprehensive plan that accounts for all of your assets and how each one needs to be titled to make sure your plan works for you the way you intended.
Plus, I offer my clients a free review of their plans and financial accounts every three years to ensure that their plans accurately reflect their lives and their wishes for their assets and loved ones.
If you want to know more about my process for funding your Trust and making sure nothing is ever left out of your plan, click the link below to schedule a free 15-minute discovery call.
