Reason #4 to Review Your Estate Plan: Your Trust is not Properly Funded

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A lot can change in three years. Just ask an iPhone salesman. And just as most millennials can’t fathom carrying around the same phone for three years, you shouldn’t consider keeping the same trust for any longer than that.

You probably already know that among the many reasons to set up a trust, one of the biggest is to avoid Arizona’s probate court system. But will your trust actually avoid probate? Of course, the answer to that depends on whether or not your trust is properly funded.

“Properly Funded” means that almost all of your assets are owned by your trust (or your trust is named as a beneficiary). That means your real estate, bank accounts, life insurance, stocks, investment accounts (excluding IRA’s), businesses, and so forth ALL need to be titled in the name of your living trust! Remember: if your assets outside the trust total more than $75,000, probate will take over.

Luckily, there is an easy solution for making sure the trust has you covered: our free lifetime service package. Once you set up a trust with us (even if it was many years in the past), you are entitled to a free trust review every three years. During this review, we always take the time to go through your assets and titles to make sure everything is protected under the trust.

Here are some points to ponder when considering if it’s time to update your trust:

  • Have you refinanced your home or other real estate? If you have, know that the bank probably took your house out of the trust during the refi and never put it back in. This alone will cause probate. So if you’ve refinanced, let us know so we can double check for you.
  • Are your vehicles in your trust? If not, don’t fret. There is a simple MVD form we can fill out for you to fix the problem, and you don’t even have to go to MVD for a new title (forget the sack lunch and 8-hr wait)! Just let us know when you come in for your trust review.
  • How about your IRA’s and 401(k)s? Because of the negative tax consequences to your loved ones, we generally do not advise clients to name their living trust as beneficiary of IRAs. The IRA Inheritance Trust is a wiser choice. How to name beneficiaries of your IRAs is a very important and case-specific question that we need to address with you at your free trust review.

We always tell our clients that having a trust that’s not funded is like buying a car without filling it up with gas: it’s just not going to do you (or your family) any good.

Contact us now to schedule your free review and ensure that your trust is doing what it was designed for!

 

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