In helping clients, we use various tools. One of those tools is the revocable living trust. In fact, the living trust is probably the most effective tool we have. If used properly, we can accomplish a lot with a living trust, including:
- Avoiding probate court
- Transferring assets privately after death
- Protecting assets from your heir’s later divorce or lawsuit
- Giving clear instructions for managing your money during your disability (like a stroke or dementia)
- Organizing assets so someone else can help manage them
- Avoiding estate taxes
- Preventing fights regarding a family farm or business
- Balancing the wife and kids in a second marriage
Unfortunately, many living trusts do not work as people expect they will. When a living trust doesn’t work, it’s usually because one or more of these essential parts are neglected or skipped:
- Proper counseling by an experienced estate planning attorney. To accomplish your wishes, you need more than a form document with the blanks filled in. What you need is a custom plan crafted especially for your situation.
- Proper asset titling. This is what we call trust “funding”. Funding of the trust simply means organizing the assets so the trust instructions will govern those assets. Funding a trust may involve retitling bank accounts, doing real estate deeds, redoing life insurance or IRA beneficiaries. In short, every asset you have must be intentionally organized with the trust in mind.
- A process to keep the plan up to date. Your plan could get out of date based on changes to your family, changes in your financial situation, and changes in the law. A perfect plan now may be a mess in a few years if not kept up to date. Estate planning is not a quick fix process, but a lifetime journey that starts now.
- Education of your family. A good plan will save your family time, stress, and money when you pass away. The more your family is educated about your plan and how it is supposed to work, the more they will carry it out as you expect, with minimal stress and maximum family harmony.
Our process is designed to address each of these potential pitfalls, so you can have true peace of mind, knowing that your plan to protect your wealth and your family will work when it’s needed.
Learn more about how living trusts can help you protect your family and peace of mind by reserving your spot at an upcoming estate planning workshop. If you don’t have a living trust, but want to learn about them, consider attending our workshop, Wills: What You Need to Know About Wills and Trusts or our New Client Orientation Workshop where you can learn about Edwards Group’s unique process. If you already have a living trust, but aren’t sure what it does, if it’s out of date or even if it will be effective, RSVP a spot in our workshop Living Trusts: What Living Trust Owners Need to Know to Make Their Plan Work.