Often clients come in to sign their trust documents and go through the funding meeting with our funding department having good intentions to get all of the checklist items done shortly after their final meeting in our office. But busy schedules and time often get in the way of these good intentions.
Whether you’ve recently formed your trust or it’s been a few years since you’ve dusted off the cobwebs to take a look under the hood of your existing estate plan, here are a few helpful tips to get you started or re-engaged in the proper funding of your trust. Most of these tips are in order to avoid a later probate action which is stressful, time consuming and expensive.
1. If you’ve recently moved to a new home or purchased additional real estate, ensure that the real estate is vested on title (by deed) to your trust. If the property is a rental property, you may want to consider the further steps of creating a limited liability company (LLC) to hold title to the rental and have the LLC assigned to your trust as owner.
2. Your non-business bank accounts should either be in “trust title” at the bank or have a pay-on-death designation (POD) naming your trust as the beneficiary at the bank.
3. If you own life insurance, you’ll want to make sure that you have a primary beneficiary and a contingent beneficiary on file with the life insurance carrier (don’t forget you may have work policies). In many cases, your trust will be either the primary or contingent beneficiary depending on the advice your attorney gave you.
4. Typically, investment accounts should be held in trust title. However, a transfer-on-death designation (TOD) to your trust can also be used at most financial institutions.
5. For 401Ks, IRAs and other qualified retirement accounts, make sure your beneficiary forms are current and up-to-date. Many commonly name their spouse as the primary beneficiary on these types of accounts and others (such as children), their trust (or a retirement plan trust) or a charity as the contingent beneficiary. Please note that if your children are minors, it is not recommended that they be directly listed on your retirement plan beneficiary form. Again, please first refer to the advice your attorney gave regarding the beneficiary designations on your retirement accounts.
If you need help updating your plan or you have a friend or family member that needs to establish an estate plan, please reach out to our Intake Department at (760) 448-2220 or at https://www.geigerlawoffice.com/contact.cfm.