If you recently signed revocable trust documents, Congratulations! Establishing the building blocks of your estate plan is an important first step in creating peace of mind for you and your loved ones. One of the main benefits of a revocable trust is the ease of administration for your loved ones and avoidance of the need to probating your estate. A well-crafted trust may also help you with things such as: managing your assets should you become disabled or incompetent; help to minimize estate taxes; provide for a child who struggles with managing their own money; or protecting your estate from lawsuits and creditors.
Receiving the full benefit of your revocable trust, sometimes called a living trust, is fairly easy. However, it takes some time and a little effort. Once your trust document is signed, it is important to complete the next steps: funding your trust and keeping it up-to-date.
• Fully fund your trust. This means that you actively transfer all assets that you own into your trust. Cash accounts, investment accounts, stocks and bonds, stock options and personal affects should all be transferred into your trust. Generally, to change ownership of assets to your trust, you must execute new title documents, like deeds for real property and signature cards for bank accounts.
Certain assets, however, should not be transferred into your trust. This includes retirement assets, which must continue to be owned by your individually. Decisions about whether to name your trust as beneficiary should be carefully considered, as it may have tax consequence that you need to fully understand.
• Keep your trust up-to-date. As time goes by, change is inevitable: goals and wishes change, the make-up of families change, and asset holdings change. Your trust, like your other estate planning documents, should be thought of as living, breathing documents. This means that they should evolve to reflect the changes in your life. Contacting your estate planning or elder law attorney at these times is imperative so you can be sure that your documents reflect these changes and continue to reflect your wishes, needs, and desires.
A trust is not just for the rich and famous, and can be a great benefit to your family with many different and important purposes. Trusts can make it easier for your loved ones to manage your assets and ensure that they are used for the purposes you identify, long after you pass away.
For more information on trusts, see our blog “What are the Different Types of Trusts” or call our offices, located in Acton, MA and Sudbury, MA, to speak with one of our experienced attorneys who can help you decide which type of trust is right for you.