Experienced Asset Protection and Estate Planning Attorney Explains Why Funding a Revocable Living Trust is so Important

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Hillel L. Presser, Esq., MBA of The Presser Law Firm, P.A., Asset Protection Attorneys, offers advice on Estate Planning

The Presser Law Firm, P.A., Asset Protection Attorneys

The Presser Law Firm, P.A., Asset Protection Attorneys

For every 60 minutes you spend making money, spend 60 seconds thinking about how to protect it!

Estate planning is the process of preparing documents to plan for the incapacity and/or death of an individual. Incapacity planning allows an individual to appoint family members or close friends who have the power to make health and/or financial decisions in the event of incapacity. Failure to have such documents in place could lead a family to be required to file a guardianship in the court system to obtain such authority. Estate planning documents also include the last will and testament and the revocable living trust, which dictates provisions for the disposition of assets to beneficiaries. The revocable living trust (“Trust”) can also provide spousal support and/or support to family members (such as children) using the assets in the revocable living trust. One major roadblock to effectuating such provisions is the failure to correctly fund the trust with assets.

1. Definition of Funding a Revocable Living Trust

Once a revocable living trust is created, with the proper execution formalities, the assets intended to be owned by the revocable living trust need to be transferred into the trust. In other words, the trust can be viewed as an empty basket and the assets must be moved into that empty basket for the trust provisions to apply to said assets.

2. Execution Formalities of the Revocable Living Trust

The execution formalities of the revocable living trust vary from state to state. Florida has the most stringent execution formalities out of all of the states. For instance, Louisiana only requires that the trust be executed (signed) in front of a notary. Florida, on the other hand, requires that the trust be executed in front of a notary with two attesting witnesses and such witnesses must be in the same room as the creator (grantor) of the trust. Any modifications and/or restatements must follow the same execution formalities in order to be valid. A modification is a small change to the trust document and a restatement is changing all of the terms of the trust document.

3. What Occurs to Assets that are not Funded into a Revocable Living Trust

Any assets that are not funded (or transferred) into a revocable living trust would be subject to court supervised probate administration. Probate administration requires the family of a decedent to file petitions with the court to ask for a court order to distribute assets that have remained in an individual’s name at death. While creating a revocable trust is completed for the purpose of avoiding the necessity and stress of probate, if an asset is not funded into the trust using the appropriate transfer documents, then that purpose fails. That is why post-execution funding of assets is just as important, if not more, than the initial execution of the revocable living trust.

4. Explanation of the Different Methods to Fund Common Assets

Each different type of asset has its own funding requirements. For instance, privately held business interests require an assignment to be executed from the individual owner(s) to the revocable living trust. Publicly held stock and bonds held in brokerage accounts requires the execution of certain forms to change the owner of the accounts to the revocable living trust. Another method could include having the trust listed as the payable on death beneficiary on the accounts. The institution that the brokerage account is with should have the forms and be able to assist with the transfer. Life insurance policies, retirement accounts and/or annuities require establishing the trust as the beneficiary of the accounts. Real property requires the execution of transfer deeds, which must be recorded in the county where the property is located. Upon recording, the deed becomes a public record. With regard to all other assets, a knowledgeable Estate Planning attorney can explain the process for funding each type of asset into the revocable living trust.

The Presser Law Firm P.A., Asset Protection Attorneys, represents individuals and businesses in connection with the establishment of comprehensive Asset Protection plans that incorporate both domestic and international components.

Visit the Law Firm’s Visit the Law Firm’s website (http://www.AssetProtectionAttorneys.com) for access to educational material on asset protection, business law, estate planning, and probate including webinars, articles and detailed legal explanations.

Contact The Presser Law Firm, P.A., Asset Protection Attorneys for a Complimentary Preliminary Consultation with one of our attorneys or to receive complimentary copies of our latest best-selling books on Asset Protection.

“For every 60 minutes you spend making money, spend 60 seconds thinking about how to protect it!” states attorney Hillel L. Presser, Esq., MBA regarding the importance of protecting your assets proactively.

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Hillel L. Presser, Esq., MBA
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