Top 7 Things To Know After You Sign Your Trust
So you have just signed your revocable living trust, and you are wondering what do I do next? This blog lists the top 7 things that I tell clients after they have signed their trust. I hope you enjoy it!
- You have some homework – you still need to fund your trust! After you are done signing the trust, the next step is to fund your assets into your trust. If it has not already been done, your residence will need to be transferred into your trust, and your bank accounts, investment accounts, and business interests will need to be transferred into your trust as well. Remember that your trust will not work the way it should, providing you benefits such as avoiding probate and in some cases minimizing your estate taxes, unless you do this homework.
- Keep the original documents in a safe place. The originals, and in particular, the original wills, are still significant and can save you and your estate lots of money in attorney’s fees. As a result, make sure to keep your trust and other original estate planning documents in a safe place. I tell clients that there are essentially two options. First, there is the “old faithful” – the safe deposit box. Second, there is the “newcomer” that is gaining ground – the home safe. Whichever one you choose, make sure to choose one, and also make sure that someone else has the ability to access the documents in your safe deposit box or your home safe.
- Be careful about giving out copies of your estate planning documents. Remember, once you give copies of your estate planning documents to your family members, you will need to continue to give copies of the revised documents to them each time you update them. As a result, in general, I do not recommend giving copies of your estate planning documents to your family members or other beneficiaries. The only exception to this rule is for the medical documents that may need to be used in an emergency, such as your medical power of attorney, your living will, and your HIPAA consent form for your family. Because these three documents may need to be used in an emergency, I recommend sending copies or pdf copies of these three documents to the person who is next in line after your spouse. And speaking of pdf copies, if clients have a secure computer at home, it makes a lot of sense to have a complete set of pdf copies of their documents on their home system for easy access later. I offer this option for my clients at no additional charge.
- Have your documents reviewed by a qualified estate planning attorney every 3-5 years. In general, for most clients, I recommend that they have their estate planning documents reviewed every 3 to 5 years by a qualified estate planning attorney. For larger estates, this is typically shortened to every 1 to 2 years. During that time, things may happen on the client’s side, such as a change in the health of a successor trustee or the birth of a new grandchild. In addition, on the lawyer’s side there are occasional updates to the state and federal statutes dealing with wills, trusts, powers of attorney, etc. Of course, if something happens sooner, you can always call to schedule an appointment sooner.
- Although I do everything I can to keep my fees as low as possible, there will generally be some fees for the review and updates to your documents. Most clients also ask if they are additional fees for the trust with respect to the review and subsequent changes. In general, the answer is yes, though I do my very best to try to keep such fees as low as possible. The amount of the fees to make the changes is generally determined by the number of changes that need to be made to the documents at that time.
- While you are alive and able, you will continue to file the same 1040 that you have been filing even after you sign your revocable trust. As a result, there are no additional tax filings for your revocable living trust. When both you and your spouse pass away in the future, then there will be a separate 1041 filing for the trust at that time.
- Do not edit or write on your trust or other documents Yes, it has happened before. Sometimes people cannot resist making that simple change to the beneficiary section of their trust to cross off the one relative who forgot to send them a Christmas card last year. Even though you may be tempted to do so, RESIST the temptation, as these types of edits could actually invalidate your trust and other documents. Instead, call your estate planning attorney to make the change, and then you can rest assured that it has been done correctly.
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