24th Aug 2016
You have faced your fears of talking about death, your assets, taxes, and other planning matters and put into place a great estate plan including a living trust. A sigh of relief escapes you as you leave the attorney’s office having signed your documents. “I’m done; I got it done,” you think to yourself. But not quite…Don’t forget about the asset transfers!
Once your trust is in place there is a next step that needs to be done. This step is almost as important as getting the documents signed. Without it, you have an incomplete plan. That step is transferring your assets into the name of or associated with your living trust. Why? You put into place a means to avoid probate when you signed your living trust. But the trust only avoids probate if it is fully funded with your assets. This is why a follow-up asset transfer meeting in person or by phone is important. Not putting assets in your trust is like getting a glass for a drink but not putting any water into it. The empty glass does nothing to quench your thirst and the empty trust does nothing to avoid probate. So do not brush this meeting off!
To be prepared for an asset transfer meeting, you should put together copies of statements on any accounts, insurance, stocks, bonds, and similar assets. You should also find any deeds on your real estate, copies of leases on real estate you own and self-financed notes owed to you. At the meeting, your assets are reviewed in detail and a plan is made for handling each asset. Some assets will be directly transferred to your trust via change of ownership or deeds. Other assets may be made payable on death/transfer on death to the trust. Each case is different based on the needs of the client. There are a few assets, such as vehicles and life estates that generally will not be transferred to your trust.
Remember you are a partner in the asset transfer process! While your estate planner may assist you with items such as deeds and filling out forms, you are needed to get those forms or access bank information as they are your accounts.
Don’t forget assets you may acquire after your asset transfer meeting. All of your assets need to be placed into your trust to avoid probate. If you are unsure how to do that or if it is necessary, just call your estate planner. They want to hear from you when you acquire a new asset–not find out by your family after you are gone. You may be thinking that this sounds like a lot of work. It does require some effort on your part but your estate planner will guide you through it. Your heirs will appreciate you taking the time to do asset transfers to your trust as well as those taking care of you during incapacity. So take the next step and get it done!