I was recently speaking with a new client in my office regarding some necessary updates to their estate planning documents. This family informed me over the phone that they had established a Living Trust about 20 years ago. A lot has changed since then, and they needed to make some changes to their Living Trust, as well as make some updates if the law has changed since they last went through this process.
When this family came into my office and we sat down together, they brought in this large binder that held their estate planning documents from twenty years ago. This client explained to me that they attended a seminar on investing and planning for retirement and ended up purchasing a "Living Trust." This caused me concern as this is usually a red flag. However, when we sat down together during this initial meeting and reviewed the Living Trust and ancillary estate planning documents, I discovered that none of the clients assets were funded into the trust!
A Living Trust is Absolutely Pointless and Will NOT Accomplish Your Goals and Wishes For Your Family If The Living Trust Is Not Properly Funded!
When I discussed this aspect with this family they were absolutely blindsided! This family had no idea that nothing was truly set up for them (despite paying a very large fee to the attorney at the time).
If you go through the process of establishing a Living Trust based estate plan, GOOD FOR YOU! Living Trusts are great tools for certain families when it comes to developing a comprehensive estate planning strategy. However, you can't stop just there! The Living Trust must be funded appropriately, beneficiary designations must be completed appropriately (sometimes naming the trust as the beneficiary of certain financial accounts), and any real estate you own must be titled in your name as trustee of your living trust.
When it comes to hiring an estate planning attorney, DO YOUR HOMEWORK! If you are going to go through the trouble of establishing a Living Trust based estate plan, you should hire a law firm that focuses their entire practice in the area of estate planning and living trusts, and is familiar with the process of retitling accounts (even offering to assist you in the retitling of your various accounts).
If you have questions about living trusts, or think a living trust might even be right for your family, contact our office for an Family Wealth Planning Transfer Session with one of our Estate Attorneys at (615) 472-2482. As always, we are here to help.