Taking care of loved ones is often a primary concern in planning for the future. As a part of this process, some Colorado residents want to make sure that their assets are passed on without the headache or expense often associated with probate. Thus, they establish a living will as a part of their estate planning process.
Unfortunately, establishing the living trust is often where this process stops. When this happens, the funds to create the document have been spent, yet nothing has been done to protect the intended assets or individuals. In order for this to happen, the living trust must also be funded.
This means that ownership of the intended assets must actually be transferred into the trust. In other words, the title to real estate must be transferred to the trust and then properly filed with the state. Additionally, the title to vehicles must also be transferred to the trust and then properly filed with the state. As far as financial accounts go, the trust must be listed as an owner of the accounts. This can often be done by filing the appropriate paperwork with each financial institution.
When a living trust is established, the individual originally owning the assets typically acts as the trustee. However, a successor trustee needs to be identified. Additionally, this successor trustee should be made aware of the trust, agree to act as successor trustee and know how to access the trust. While a living trust is effective in avoiding probate and giving loved ones’ privacy, it is only effective if it is properly funded and plans are in place for after the trust’s creator is no longer able to manage it. An experienced estate planning attorney can guide the Colorado resident through the steps necessary to make this an effective tool.
Source: Forbes, “7 Big Estate Planning Mistakes“, Bob Carlson, Feb. 28, 2018