It’s that time of year again: time to break out our Shakespeare, sharpen our cutlery, and remember the dangers of not preparing for the inevitable. For on this Ides of March, I come bearing a dire warning for all of you, dear readers, about the importance of funding your new trust, and what happens when you don’t! Because just like my high school unit on Julius Caesar, you still have homework to do even when your trust is all signed, stamped, and sealed.
Friends, grantors, countrymen—lend me your screentime! I come to prevent probate, not to cause it! The trusts that men gather may live on after them; their wills are oft interred within probate. Don’t let this be so for you!
Beware the Idle Assets!
Although estate planners like us are happy to help create your estate plans, trusts can’t just sit forgotten until they’re needed. After signing your completed estate plan, it is vital that you, the grantor, remember to transfer ownership of each asset in the trust (except for retirement and life insurance funds!) to the trust. This will probably mean long phone calls and chats with customer service, but power through! Otherwise, when it comes time to execute your trust, distributing your well-earned assets, there won’t actually be anything in the trust to distribute!
Wills are Not Always the Way
“Aha,” I hear some of you say; “but that’s what a pour-over-will is for! It says that I want my written trust to guide where my untitled assets go; so, everything will go where I want in the end.”
And to that I say: you’re technically right…emphasis on technically. Wills and trusts do not provide the same protection. The pour-over will is a safety net. However, trusts help us avoid forcing our loved ones to go through probate. That means loved ones spending time, money, and energy to resolve an already emotionally fraught situation. In order to make the pour-over-will officially cover all those untitled assets, a judge first has to read and approve the will—and answer any objections that might arise in the process. That, put simply, is probate (but you can learn more here). Trust me; a smoother road for your beneficiaries later is well worth a few annoying phone calls now.
Click here to learn more about the differences between wills and trusts.
You Won’t Have to Do it Alone!
At Phillips and Ballenger, we put special emphasis on the importance of funding. Your estate plan will come with funding instructions, and even a nifty checklist to track which assets you’ve successfully transferred. Even better: after signing your estate plan, we’ll schedule a funding meeting with you, where we’ll check your progress and answer any questions you may have.
And if, after all of that, you still haven’t resolved to fund your trust, I can only say…Et tu, Bruté?