At Sinclair Prosser Gasior, we believe that the best estate plan has a Revocable Living Trust as the foundation. A Living Trust is a way to hold title to assets, just like sole ownership, joint tenancy or as a married couple. The main reason most individuals choose and appreciate a Revocable Living Trust is, if set up properly and all assets are titled properly, your estate will avoid probate.
Once you establish your Revocable Living Trust, you must fund the Trust. What I mean by that is that you must re-title your assets so that the trust either owns the asset or is a named beneficiary.
For example, if Bill and Mary Jones set up a revocable living trust, and name themselves as initial co-trustees. They then will need to re-title their assets to “Bill and Mary Jones, Trustees or their successors in trust of the Jones Living Trust dated April 11, 2012”. This includes their house, bank accounts, brokerage accounts, savings bonds and any other assets they were advised to re-title by their estate planning Attorney.
A house is re-titled by filing a new deed. Bank accounts usually require a letter of instruction to the bank or financial institution. Brokerage accounts may need a form filled out to change title. Savings bonds have their own process which may include surrendering them to the Federal Reserve. It is important to note that not all assets are treated the same. Some assets, such as IRAs, 401ks, and TSPs may have tax benefits if a person, such as a spouse or child is named as the beneficiary.
At Sinclair Prosser Gasior, we understand the importance of funding your living trust. We assist our clients in the preparation of letters of instruction, or change of ownership or beneficiary forms. And when you become a client, we provide ongoing support and encourage you to complete your funding at subsequent meetings and client reviews. It is our hope that when the time comes, your estate will be able to avoid probate as you originally intended.
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