As an attorney practicing exclusively in the areas of estate planning and probate administration, I am keenly aware of the common mistakes that many Tennessee families make when it comes to their revocable living trust. Therefore, I have compiled a list of the following four most common mistakes when funding a revocable living trust.
- Thinking All You Need to do is Sign the Revocable Living Trust
By far, the most common mistake is failing complete any funding of your revocable living trust. There are many families that believe that once everything is signed in the lawyer’s office, that everything is taken care of. However, that is not always the case. Although your Last Will and Testament will usually include language stating that all of your property is to go into the name of the trust, this alone will not accomplish your goals when you established the revocable living trust. After signing all of the trust and estate planning documents, it is important to physically fund the trust with your assets, otherwise your goal of avoiding probate and making the estate settlement process simple for your family will not be accomplished.
- Failing to Transfer Your Home by Deed into the Name of the Trust
The probate process in Tennessee requires that any property that you hold in your name must go through the probate court system before it can be transferred to your loved ones, this includes any real property that you own. Therefore, if you fail to deed your home out of your name into your name as trustee of your revocable living trust, this will be considered an asset that will have to pass through the Tennessee probate court system.
- Failing to Send a Copy of your Trust and Estate Planning Documents to Your Financial Advisor
There are a number of reasons that your financial advisor needs to have a copy of your trust document. For instance, your estate planning attorney and your financial advisor may determine that the best strategy is to change the beneficiary designations on your investment accounts, IRA accounts, annuities, and 401(k) accounts to that of your trust. Failing to have this discussion and making sure that your financial advisor has a copy of your estate planning documents could result in your assets not passing to your loved ones in accordance with the provisions of your trust.
- Failing to Stay in Touch with Your Estate Planning Attorney After You Buy or Sell New Property
A very common estate planning mistake, especially when a revocable living trust is involved, is failing to stay in touch with your estate planning attorney. When you fail to stay in touch with your estate planning attorney it may lead to your estate planning documents not fulfilling your needs after major life changes or after law changes that you may not be aware of. If you acquire new real estate or purchase a new investment asset, you need to speak with your estate planning attorney so that this property can be transferred into the name of your trust. One of the many benefits that our clients receive is all future legal services for one reasonable fixed and upfront cost. Many of our clients tell us that the best thing about working with our law firm is that they will not owe any additional cost in the future to amend or change documents due to life changes or law changes.