PLAN – DOCUMENT – REVIEW – UPDATE – PROTECT – GIVE

Having an estate plan in place can offer reassurance that your assets will be managed according to your wishes, both during your lifetime and after you pass away. While many people think of wills as the centerpiece of an estate plan, wills can be contested and have to go through a lengthy probate process. Instead, many people will use a trust to transfer assets to their loved ones. There are several reasons why you might decide to establish a trust. Accordingly, there are many types of trusts, each corresponding to a different goal or financial situation. If you need to get your estate sorted, a financial advisor can help.

Once you have created your trust documents, it is vital that they be revisited regularly to ensure they have reflected changes in your life and are relevant and up to date (think marriages, divorces, grandkids, sale and purchases of new assets etc.). Here are several Potential loose-ends to review for two types of trusts: The Revocable Living Trust and Irrevocable Life Insurance Trust.

Revocable Living Trust     

A revocable living trust simplifies the handling of your property in your estate, maximizes privacy for your family by reducing the family assets subject to probate, and creates a management vehicle for your assets that can assist your successor trustees if and when you become unable to do it on your own. This type of trust has grantors, trustees, and successor trustees, as well as beneficiaries (lifetime and postmortem), sub trusts (marital or family), distribution provisions (lifetime and postmortem), and disability provisions.

Potential loose-ends to secure and manage

• Maintaining the Trust: to ensure all assets, current and newly acquired are titled to it. This is easy to overlook!!!
• Updating successor trustees and beneficiaries based on your desires and/or changes in their status of (divorce, marriage, death, etc.)
• Educating the successor trustees about their duties and your desires
• Communicating your plan to your heirs for their understanding
• Hosting instructional and educational family briefings to educate and prepare the successor trustees and beneficiaries for their duties 

Irrevocable Life Insurance Trust

An irrevocable life insurance trust removes death benefit proceeds from your taxable estate, protects cash values in the trust from claims and creditors, and controls the amount and timing of distributions. This type of trust has trustees, successor trustees, and beneficiaries, and owns life insurance policies, which can be a single life policy or a survivorship policy.

Potential loose-ends to secure and manage

• Arranging for the transfer of funds to pay the insurance premiums (and updating it with any life insurance changes that affect it)
• Creating and sending the annual Crummey Notices
• Filing a gift tax return, if needed
• Ordering the in-force policy illustrations
• Reviewing the policy’s performance, relevance, and current suitability

If you are interested learning more about our Loose Ends – Wealth & Beyond programs check out our recent blogs on the subject and specific areas to concentrate on tying off loose ends or reach out to your advisor today!

• LEM – Looking at Wealth & Beyond – Getting the Most out of the Financial Future You Have Built
• LEM – The Bigger Why – Which provides an overview of Loose Ends Management
• LEM – Reviewing Your Memorial Instructions – Ensuring your wishes are documented and communicated to those who will carry them out
• Reviewing Your Last Will & Testament – Defining personal intentions and determining asset distribution
• Reviewing Your Trust Documents – Estate planning revised
• Reviewing Your DAF & Other Philanthropic Vehicles – Leaving a legacy and giving to the causes that mean the most to you and your family
• The LEM Asset Microscopes – Getting focused on documenting assets
• Family Limited Partnerships – Making decisions with those you love the most