I love using revocable living trusts in estate planning. When a trust is drawn out the right way and properly funded, it saves time, money, loss of privacy and other complications in the settlement of an estate. Trusts really work well. They avoid the probate process.

One thing that people often forget is that when you have a trust, you do need to make sure your assets are owned by you in the name of the trust. This means that the assets need to be titled in the name of the trust. For example, when you put your home into the trust there needs to be a new deed transferred from you, to you as trustee of the trust. The deed needs to be recorded in the county where the property is located.

Banks need to be notified that your accounts require a name change from your personal name over to the name of the trust. The bank will require you to get new signature cards. Investment and brokerage accounts should also be titled in the name of the trust. Make sure that the broker knows that the trust is the owner of all those accounts. Even if the accounts are considered by you to be a part of the trust, unless the title on those accounts is placed in the name of the trust, they will still be considered to be titled in your name and will still be subject to probate.

How do you accomplish changing the name and title of assets? It is a two-step process. First, the assets should be re-titled properly in the correct name of the trust. Second, the assets should be listed on the schedule of trust property so that the successor trustee will know what assets are under his or her administration if you should pass away. That means you will need a list of trust assets. The assets must be properly titled in the name of the trust. In order to complete a trust, these steps must be followed precisely.

In all of my years of estate planning experience, I have found that if I don't help people do this transfer, it often doesn't ever get done. That leaves assets that will still have to go through probate. I always make sure that I help transfer the asset, write letters to the banks and the investment advisors and others to make sure all assets are properly titled in the name of the trust. This ensures that the errors of the estate will retain all of the advantages of the trust like avoidance of probate, reduction of tax reductions, and the avoidance of a problem in the event of incapacity. These must all be spelled out in the trust document.

 

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