If your estate plan includes a Trust, how do you know if your Trust does what it’s supposed to do? There are many different Trusts, all designed for specific purposes. The key is to make sure that your Trust does what you think it does! For example, our attorneys review a lot of Trusts that clients think is protecting their home form long-term care, only for us to tell them that they don’t have the protection they think they do.
Whether you have a Trust from our firm or a previously existing Trust, it’s crucial that your Trust is properly funded and you understand how your Trust will be administered.
What is Trust Funding?
The process of transferring your assets into your Trust is called “funding” your Trust. In order for your Trust to meet your planning goals and to avoid probate of your assets, it is critical that your assets be titled in the name of your Trust.
There are several steps that must be taken, as well as paperwork to be completed and signed – this is an essential step in your plan if you have a Trust! For example, an unfunded or partially funded Revocable Living Trust does not avoid probate. There is a definite advantage to having us fund your Trust for you, versus the time and effort you will have to spend to do it yourself.
Fund your Trust the hassle-free way: Let us do it for you!
Funding your Trust takes time. Time that you could better spend doing something else – making money, spending time with family, or just plain relaxing. Funding your Trust also requires the completion of numerous documents for your bank, insurance company, and other financial institutions. If you fill the paperwork out incorrectly, you risk making your entire estate plan ineffective!
There are two options for funding your Trust:
1. Fund your Trust yourself (approx. 20-25 hours of work, phone calls, filling out documents, and hoping you did it right); or
2. Monteforte Law, P.C. will do the Trust funding for you.
Most clients prefer that we do the Trust funding, because of the number of hours involved in calling and writing to the bank and other institutions, completing the institution’s confusing paperwork, which is different for each bank and insurance company, and filing the paperwork to accomplish the funding. However, some clients do prefer to undertake this themselves.
What are the benefits of having Monteforte Law fund your Trust?
- We make it hassle-free by handling all calls and letters for you.
- We complete all paperwork, and all you have to do is sign.
- We provide written authorizations so that your financial institutions can deal with us, not you.
- We know what we’re doing – the paperwork will be filled out correctly so that your Trust is properly funded.
- We follow up with the banks and insurance companies to obtain confirmation of the changes.
- We do it right – you don’t have to worry about filling something out wrong.
- We stay on top of it, so nothing slips through the cracks, and take the whole thing off your plate.
What is Trust Administration?
When you have a Trust as part of your estate plan, you have to choose someone to be a “Trustee”. The Trustee is the person (or people) who have to follow the instructions in the Trust and do what it says. Depending on what type of Trust you have, you might be your own Trustee, or, you might have chosen someone else to be a Trustee. Trust Administration refers to the actions taken by the Trustee, to do what the Trust instructs them to do.
Some examples of what a Trustee does as part of Trust Administration are:
- Gathering assets and putting them into a Trust bank account or investment account.
- Selling property.
- Making investments.
- Maintaining and paying bills for real estate held by the Trust.
- Filing Trust tax returns and paying taxes.
- Distributing funds to the beneficiaries.
- Accounting to the beneficiaries by telling them exactly what was done with the Trust funds for a set time period.
- The Trustee must act in good faith, and in the best interest of the beneficiaries.
The Trustee must keep strict compliance with the terms of Trust, as well as compliance with the applicable state and federal law. While a Trustee is generally allowed to charge a reasonable fee for the services provided, the job does come with some potential pitfalls. For example, beneficiaries might not be happy with the Trust investments, sale of property, and/or feeling like they aren’t getting their “fair share”.
Do you need help?
Were you named as Trustee of a Trust? What should you do next?
First, download a FREE copy of our “Trustee’s Guide - What to do when a loved one passes” available to you free, here. Then, consult with an experienced estate planning attorney to make sure that you are in compliance with all rules and laws. The attorney can be consulted before you take any action, and the attorney can even give you an outline of the terms of the Trust and what your duties and responsibilities are as a Trustee.
To take it a step further, a properly licensed attorney can advise and even manage Trust investments for you, and relieve you of that burden. It minimizes the risk of you doing something wrong when acting as a Trustee. While Trusts are a great tool, unhappy beneficiaries can initiate litigation if they feel the Trustee isn’t acting properly. Having an experienced attorney on your side will be an invaluable resource for you.