Many people use a Revocable Living Trust as part of their estate plans. There are several advantages to using a RLT over simply relying on a Will or joint ownership of assets.

Many people use a Revocable Living Trust as part of their estate plans. There are several advantages to using a RLT over simply relying on a Will or joint ownership of assets, such as increased flexibility, avoiding the probate process, saving your heirs time and expense, and keeping your estate matters private and out of the public eye. One important thing to remember, however, is that you are not finished with the process just by signing a Trust Agreement; the Trust will need to be funded.

Funding your Trust is the process of transferring your assets from you to your trust. To do this, you physically change the titles of your assets from your individual name to the name of your Trust. If you are married, you and your spouse might change the titles of your jointly owned assets to your Trust. You may not be able to transfer all of your assets to your Trust, however. For example, retirement plans such as IRAs cannot be owned by your Trust while you are alive. However, you can change the beneficiary designation for your IRA to your Trust as primary or contingent beneficiary to receive retirement benefits after your death.

If you have signed your Trust Agreement but have not changed titles and beneficiary designations, you are unlikely to avoid probate. Your Trustee can only immediately control the assets you have put into the Trust. You may have a great Trust instrument, but until you fund it, it does not control anything. If your goal in having an RLT is to avoid probate at death and court involvement at incapacity, then you must fund it now, while you are able to do so.

You may transfer some assets and your lawyer may handle the transfer of others. A lawyer will likely need to be involved in transferring real estate and completing more complex beneficiary designations, but then provide you with instructions for transferring your other assets, such as bank accounts. Ideally, your lawyer will review each asset with you and determine what steps need to be taken and who will be responsible for each step. If you have a good understanding of the process, you may decide to handle many of your assets yourself. However, saving on legal fees should not stop you from involving your lawyer as needed to ensure that assets are properly transferred and beneficiary designations are properly completed.

If you have questions about Revocable Living Trusts or any other estate planning tools or techniques, give us a call at 253.858.5434 to set up an appointment today.