I Have a Trust, Now What?

Getting your estate planning documents is the first step but it does not mean that the process is complete, you still need to make sure that all your assets are flowing to the Trust. 

The following things need to be done immediately after you have your Trust in place:

• Real Estate.  If your attorney did not convey all your real estate to your Trust then you need to make sure that this step is done.  This can be done through a deed transferring the property directly to the Trust or through a Transfer on Death Deed listing the Trust as the beneficiary.  We always include deeds as part of our estate planning practice but not all law firms do. Also, if you purchase additional real estate after the fact you will need to ensure that these steps are done for that new property as well. 

• Bank Accounts.  You need to make sure that your bank accounts (but not your retirement accounts) are titled in the name of your Trust or that the Trust is the payable on death beneficiary of your accounts.  It is best to verify with your financial institutions that the proper documents have been completed.  We recommend just asking your bank the next time you go into a branch for them to check that all your accounts have a beneficiary designation and who is listed. 

• Retirement Accounts (IRA, 401k, 403b or similar plans).  You should not change the ownership of any retirement accounts to your Trust as such would create a taxable event.  You should complete the appropriate beneficiary designation for these accounts to either leave them to your Trust or to individual beneficiaries.  Your financial planner should be able to explore the different tax treatments of these options with you.  We recommend next time you meet with your advisor to verify the current designations and that every account is covered.
• Life Insurance.  If you have any life insurance policies now is a good time to verify that named beneficiaries are who you intend to receive the funds.  This can be an individual or your Trust. 

• Vehicles.  We would encourage you to complete the necessary forms with the tag office to designate a transfer on death beneficiary for any vehicles you now own or will own in the future.  You can also title the vehicles in the name of your Trust, just make sure your insurance company is aware of the same.

• Safe Deposit Boxes.  We would encourage you to change the ownership of any safe deposit box to the name of your Trust to ensure that any successor Trustee has access to the box.  This is particularly true if you leave items of value that are not easily transferrable to someone such as coins, gold or silver. 

If the steps listed above are not taken, then it likely that a probate will be required to allow for the transfer of certain assets that remain outside of the Trust at the time of your death.  

Once you have gotten all the proper designations on your assets as detailed above there are a few things that you will need to keep in mind long term. 

1. Change in Circumstances.  Determine if your circumstances have changes such that your current estate plan no longer fits your needs.  We often have people that will set up a Trust when their children are younger in case something happens to them, and now it is 30 years later and their children are all competent adults, it might be that the Trust is no longer needed.  Sometimes the Trust will complicate matters that are no longer complicated.  A good estate planning attorney can help you revise your estate plan to fit your current needs. 

• Loss of Someone.  If something happens to someone that you have named as an Executor, Trustee, Successor Trustee, and/or Attorney-in-Fact (Power of Attorney) you should take steps with your attorney to have your documents updated so that there are people still designated in those positions.  We have often seen where someone had documents such as a Power of Attorney drafted and when they actually needed it none of the named individuals were still living and additional steps were needed to set up a Guardianship or Conservatorship to make sure that the individuals needs could be met.  Therefore, review of these documents every few years is a good idea and make sure that you still want the people you have listed to hold those positions going forward.

• Retention of Original Documents – Trust. You need to maintain your original estate planning documents. In the future, should you amend the Revocable Trust, you should be sure to retain the enclosed original trust agreement even if you amend your Revocable Trust in its entirety. In fact, you should retain all prior versions of the Revocable Trust, no matter how many times you amend it. Third parties may require that all prior versions of the Revocable Trust be provided after your death, and if all prior versions cannot be located, then problems for the beneficiaries of your Revocable Trust might ensue.

• Retention of Original Documents – Will.  The same is true of your original Will.  Under Kansas law the original Will must be filed with the Court after death.  If a Will cannot be located after your death there is a presumption that the Will has been revoked.  Therefore, you should keep your original documents in a safe location known to your Executor so that they can be located upon the event of your death. Further, your Will cannot be amended by crossing out words and sentences, or by making handwritten changes to the original. Any changes must be undertaken with the formalities otherwise required for execution of a Will.

If at any time you determine that changes are needed for your Estate Planning documents, you should reach out to a local attorney to make sure that all changes are done to comply with state law.  There are many pitfalls that can occur when trying to use documents found online or by trying to execute documents by yourself that may result in the documents being invalid.  As always Minter & Pollak, LC offers free estate planning consultations including those to review existing documents to see if they need to be updated.  Please contact us at 316-265-0797 to set up your free consultation.