The firm regularly assists clients with the necessary and proper funding of their Revocable Living Trust. If a Revocable Trust is not funded it is useless. Not properly funding a Revocable Trust will result in a need for costly Probate and defeat the purpose of a Trust. Funding involves different concepts and forms depending on the particular assets owned by a client.
A typical client owns real estate, their home. Sometimes a client will own more than one home or a cottage and sometimes owns real estate in another state like Florida. The firm will prepare the proper deed(s) for a client to make sure that Probate will be avoided on death. The firm will also prepare and file a Property Transfer Affidavit so that a client’s real estate tax assessment is not uncapped. We will also assist with selecting competent counsel in another state for deed preparation if a client owns out of state real estate.
Many clients have life insurance. It is important to select the proper primary beneficiary and also contingent beneficiary on all life insurance policies. This can be accomplished with proper completion of a beneficiary designation form. Failure to designate the proper beneficiary will result in a need for Probate Court involvement upon death of the insured. Minor children should never be named as a beneficiary. Rather the Successor Trustee of the Revocable Trust is typically the proper beneficiary for minor children. Failure to designate a contingent beneficiary will result in Probate if the primary beneficiary named on the life insurance policy is deceased.
Many clients have retirement accounts such as 401ks and or IRAs. Designating the proper beneficiary on a retirement account is not only important to avoid Probate but critical to allow for the deferral of income taxes. An improper beneficiary designation on a retirement account can lead to an increase in income taxes because the entire account could end up taxed over a short five year period instead of being taxed over the intended beneficiary’s life expectancy which typically is much longer. Also critical when a child is to be a beneficiary or contingent beneficiary of a retirement account is the language of the Trust agreement. The Trust needs to be a “look through” or “see through” Trust under Treasury Regulations or costly problems can occur.
Almost all clients have bank accounts and many clients have brokerage accounts for stocks bonds and mutual funds. The firm provides assistance with making sure these types of accounts are placed into your Trust so that a costly Probate is avoided on death.
Please contact the office today for an appointment to discuss and implement your estate planning needs.