By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho
That was a question a college friend asked me during our last visit. She was concerned that the revocable trust she set up before retiring was not what she wanted now.
This was my answer:
Problem One: Failing to coordinate titled assets to reflect the estate plan. This means transfer real property titled into the trust name. Change brokerage accounts, mutual funds, stocks and bonds and other titled assets into the trust name once the trust is created. In addition, change the beneficiary designations on life insurance, annuities and retirement accounts to the name of the trust or specific individuals. Bank accounts should be made “Paid on Death” [POD] or “Transfer on Death” [TOD] to the Trust. Failing to take the time to do this “homework” may make it difficult to follow an estate plan, and may require that an estate ends up in the Probate Court. The probate of an estate is usually required if there is a titled asset in the name of a dead person. Most people chose an estate plan using a revocable trust to avoid the need of a probate.
Problem Two: Failing to choose the right agents to serve as successor Trustees of the trust when the trust creator is incompetent or dies. The Trustee of a trust is the money manager and expected to follow the wishes of the trust creator. Often the nominated Trustee lacks the skills to handle the job. They are required by law to follow the instructions in the revocable trust, protect the trust assets, be conservative in the investment of trust funds, pay expenses, and disclose to the beneficiaries an accounting of the trust assets. Does the nominated successor Trustee really have the skills and the time to properly perform this job?
Problem Three: Failing to keep the revocable trust up to date. I recommend to our clients that they review their trust documents at a minimum every three years. Why? Over that time period it is highly likely one of four things will change: your relationship with people, the law, your health or your finances. Any one of those changes will have an impact on the revocable trust, which is the core of an estate plan.
I don’t suppose any of these three issues are things you are facing?
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