Issue 37.17
For a person to get all of the benefits from their trust, their assets need to be coordinated with the trust. I have chosen the word “coordinated” carefully because different assets have different properties that work in different ways with trusts. Some assets, such as stocks and real estate, usually are owned by the trust right now. Other assets, such as life insurance and IRAs, might be paid into the trust at the death of the owner.
When we prepare trusts for clients, we look at each of their assets and decide how their trust can be used most effectively. For example, we usually prepare deeds for real estate, transfer forms for brokerage accounts, beneficiary designations for life insurance, and assignment documents for businesses. Of course, there are many types of assets. Water rights, cattle brands, copyrights, airplane titles, bank accounts, car titles, and all other assets need to be considered and usually updated into a trust estate plan.
Once a client’s assets have been coordinated with their trust, their trust will work to avoid the need for a court appointed conservator if they become incompetent. It will also avoid probate court at their death. Trusts work remarkably well to manage assets during times of incapacity. They also are very efficient to hold and distribute assets at death. But all too often I see situations where people have signed their trust on their own or with other attorney offices, but did not make sure that their assets were integrated with it. When that happens, we usually end up in court to deal with problems that could have been avoided. An empty trust is like a car without an engine. It might look like a car, but it is not going anywhere.
That is why our office works with each asset to ensure it will be managed and treated as it should with a trust estate plan. Because of the complexities that sometimes arise in updating assets, our clients are grateful they have us to work through the details and ensure it is done correctly. Over the last 18 years of preparing trusts, I have seen many changes in the processes of updating assets. Some companies have made things more complex, and some have made it easier. While some have added more forms and paperwork, others now accept a telephone call after verifying identity. The manner of getting the job done is in constant change, although the principles are the same. We have become accustomed and comfortable working through those processes.
If you have any questions about whether any of your assets have been properly coordinated with your trust, you should contact my office at 435-673-9220 for a free consultation.