Now that you have completed your living trust, the following are some recommendation as to the next steps.
We recommend that the original documents be placed in a fireproof safe in your home. As we discussed, you should advise your trustee and the agents under your durable power of attorney and advance health care directive how and where they can obtain these documents when necessary. You should always retain the original trust, even if it is restated.
We recommend that you keep a list of your current assets and accounts in a place where your trustees and agents can locate the information. The information should be updated at least once a year.
Funding the Revocable Trust
If you own your principal residence, the deed transferring your residence to you as Trustee of your Trust has been sent to the county recorder. The original recorded deed will be returned to you once it has been processed by the county.
You should notify your insurance company (and/or insurance broker) of the transfer of your residence to the Trust and request that the Trustee be added as an additional insured on any policies, including your homeowner’s insurance and umbrella insurance.
You should consult your title company and obtain any necessary endorsement to your title insurance to ensure that the policy continues to apply.
The original Trustee’s Certification of Trust is for your use when transferring accounts to the Trust.
Beneficiary Designations
To ensure implementation of your estate plan, you should review and make sure the beneficiary designations for your IRAs, 401(k)s, other qualified plans, and your insurance policies are complete. We do not recommend naming the living trust as the beneficiary- you must consult with your IRA/401(k) plan administrator to discuss further the tax issues. Please let us know if you would like assistance in preparing change of beneficiary forms.
Pay-on-Death Accounts and Joint Accounts
The terms of your Will and Trust do not govern the distribution of any pay-on-death (“POD”) accounts or joint accounts. On your death, those accounts will pass as provided in the documents you and the bank, brokerage, or other institution used to create the account. These types of accounts can seriously alter the distribution of your assets, and thus undermine your estate plan. Although it may be preferable to name the trustee of your Trust as the beneficiary on your household checking account (in order not to have to open a new checking account in the name of the Trust), most other accounts should not be held in POD form or joint tenancy. You should periodically review your accounts—including your brokerage accounts—to make sure that, if they are pay-on-death accounts, they do not conflict with your estate plan as we have discussed. This review is best done by contacting the institutions where the accounts were created. Please let us know if you need assistance with this process.
Changes to Your Estate Plan
Your estate planning documents have been executed with certain formalities and should be changed or revoked only through similar procedures. Adding notes in the margin, or striking out or adding words to the documents, even if initialed or signed by you, will probably not be effective to change the terms of the documents and will cause confusion among your beneficiaries regarding your intent. You should review any proposed changes or amendments with a knowledgeable attorney.
Estate Plan Review
You should contact us or another attorney if you want to make changes to your estate plan or if there are changes in the tax and estate laws. A substantial increase in your net worth, a change in the type of assets you own, or a decision to purchase life insurance may require changes in your estate plan. You should also review your plan if there are changes in your marital status or family circumstances or in the event of serious illness. If you move to another state, you must have an attorney familiar with the trust and estate laws of the new state review your estate plan.