Have you decided that you want to handle your estate planning with a revocable living trust? If so, you'll want to follow these tips so that you can avoid making any mistakes.
Have Other Ancillary Documents in Place
Know that your revocable living trust is not the only thing that you need in place for proper estate planning. Other ancillary documents will be necessary to form the complete picture necessary so that everything is in place. For instance, you need to have a power of attorney document in place so that someone can make decisions for you if you are incapacitated. The person with power of attorney can help transfer items into your trust that others do not have access to, such as retirement accounts, if it is necessary.
Know Who Your Beneficiaries Are on All Accounts and Policies
There are many things that you cannot put into a revocable living trust, such as life insurance policies. The payout for those accounts after you pass away will go to the account beneficiaries, not those people in your revocable living trust. That's why it's so important to make sure that the beneficiaries that are listed on accounts are accurate. You may be surprised at how many people assume that they designate the person in the trust and they are all set, but there may be an ex-spouse or someone that has passed away as an account beneficiary.
In addition, know that it may not be best to list the revocable living trust as the beneficiary for these accounts. The fastest way to get those heirs their inheritance is by being listed as a beneficiary. If you know you want the money to go to, make it so they get the money directly. All they need to do is provide a death certificate and the money will be transferred to them. It is unnecessary to make everything go through the trust when being a beneficiary is much more efficient. Keep things as simple as possible.
Update Your Revocable Living Trust Right Away
You never know when you are going to pass away, which is why it's important to update your revocable living trust as soon as you have the desire to do so. If you end up putting off the process of making a change to the revocable living trust, there may come a time where you are no longer able to and it will remain in its current state. You can work with estate planning attorneys to learn more about the process.
Share30 July 2021
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