Align
You’ve taken a significant step in securing your future and the future of your loved ones. Now, it’s time to align your beneficiary designations and asset ownership with your estate plan.
Update beneficiaries
Beneficiary designations supersede wills and trusts. Thus, ensuring that beneficiaries of life insurance policies, retirement accounts, annuities, and other accounts match your plan and wishes is critical.
If property is to be transferred to your trust at your passing, contact each institution and confirm its preferred method and verbiage for designating your revocable living trust. For benefits through your employer, check with your HR department first.
Important: A revocable living trust should only be designated as beneficiary of 401Ks, IRAs, and similar retirement accounts for good reason and if the trust includes special tax provisions.
Update asset ownership
Update the ownership of bank accounts, taxable brokerage accounts, tangible personal effects, vehicles, closely-held business interests, and out-of-state real property to match your plan and wishes, if necessary. This is especially critical if your plan includes a revocable living trust. Otherwise, your trust will not work as intended.
Prior to such transfers, alert your insurance advisor, and title insurer if re-titling real property, so that your insurance policies (e.g. home, home warranty, auto, umbrella, business) may be updated accordingly.
For more guidance, see the Funding section below.
Funding
Complete the relevant tasks in this section, or your Probate Avoidance Trust will not work as intended.
Third parties (e.g. a bank) will typically request a copy of your trust or, at a minimum, will want to know the following trust identifiers:
Trust Name
Effective Date
Grantor (i.e. trust maker)
Trustee (i.e. trust manager)
Tax ID
Trust Address
Most clients have no trouble completing the recommended funding items, but occasionally, a client will request our active support with funding services. We are happy to assist, upon request. Additional fees apply.
Tangible personal property
Notify your insurance advisor that you have transferred your belongings (e.g. jewelry, collectibles, home furnishings) into your trust and confirm any necessary updates.
Remember that cars are excluded unless you switch the titles with the DMV (see Autos below).
Residence
We recommend our colleague Matt (info below) who serves all of our clients for help with re-deeding real estate into their trusts. Ask Matt to confirm any necessary updates or endorsements to your title insurance policy. Prior to the transfer, be sure to alert your insurance advisor and home warranty company (if applicable) so all coverage is updated accordingly.
Matt Doyle
[email protected]
(704) 749-7748
www.doylewallace.com
Life insurance
In nearly all cases, you should name your Probate Avoidance Trust as the primary beneficiary of your life insurance. No secondary beneficiary is needed.
401Ks, IRAs, and similar retirement accounts
You will remain the owner of all such accounts.
If anything, you may need to update beneficiary designations to match your plan and wishes. However, you will rarely name your Probate Avoidance Trust as a beneficiary unless it contains special tax provisions.
Checking, savings, and regular brokerage accounts
Work with your financial institutions to transfer all personal taxable accounts into your Probate Avoidance Trust, either through an account conversion (i.e. a 1-step legal reclassification) or an in-kind transfer of holdings into a new trust account. If a new account is required, then be sure to switch all electronic connections before closing the old account.
Autos
Many clients will opt to leave their autos in their personal names rather than deal with the DMV. For probate avoidance reasons, however, it makes sense to also coordinate with the DMV (and lenders if there’s a car loan) to change car titles and put your autos in your trust. Doing so further reduces the probate burden imposed upon your loved ones after your passing.
Focus on the other funding items above as the higher priorities and then tackle your autos if you choose. Be sure to discuss the issue with your insurance advisor as well, prior to making this switch, so s/he can update your auto coverage appropriately.
LLCs and Corporations
Proceed with transferring your business interests into your trust.
Share
Share your arrangements with loved ones and decision-makers to ensure a comfortable level of access to and knowledge about your estate plan.
Secure your original documents
Keep originals in a secure and accessible place such as an at-home safe or fireproof folder. Avoid storing in a safe deposit box. Advise all decision-makers and loved ones on how to retrieve the originals in case of emergency. Generally speaking, there is no filing requirement during your lifetime.
Additionally, save our email with your signed copies attached so you can access your Health Care Power of Attorney and HIPAA Waiver in a medical emergency. Plus, upload copies of your medical directives to your primary physician’s office and preferred hospital system through MyChart.
Share copies with loved ones
To the extent you feel comfortable doing so, share copies of your documents with your loved ones and the parties who are named to serve in some capacity. We will also retain copies in our file. Make a list of everyone who receives a copy. If you ever change your documents, you will have a list of where to send updates.
Discuss roles and responsibilities with your decision-makers
Discuss the roles and accompanying responsibilities with each decision-maker you named. Let them know what they’ll need to do in case of incapacity or death and who will be responsible for handling specific tasks. If appropriate, consider holding a family meeting to discuss the choices you made and why you made them.
Begin to prepare your beneficiaries for the property you are leaving them. Or, if you prefer otherwise, no specific financial information needs to be disclosed. Introduce them to your advisory team so they know who to call when the time comes. The better prepared they are, the smoother the transition of property to them at your passing.
Compose
Compose several informal documents to record important details for your decision-makers to reference when a need arises. Be clear and concise, and add anything that you believe is important and would help things run smoothly.
Key Contacts
List names, contact info, and roles or titles for all decision-makers who are named in your estate plan. List your advisors such as our firm (as your estate attorneys), accountant, financial planner, insurance advisor, and banker. Also list doctors.
Download a Template
Crisis Plan
Note any time-sensitive steps or matters to be considered in case of emergency. Where will minor children stay? Who will look after pets? What property should be secured? What bills must be paid? List out daily tasks that you handle. Also include medical conditions, medications, burial/cremation preferences, and funeral/memorial plans, if any.
Download a Template
Estate Map
Keep an updated list of all of your assets, liabilities, social media and other online accounts, and insurance. Don’t overlook home maintenance details (water, gas, power, lawn care, etc.), email, photo and music storage sites, websites, and blogs. Include passwords for all of the above plus laptops and digital devices. Consider using an online password manager such as 1Password which is our personal favorite.
Download a Template
Letter of Intent
If your estate plan includes a discretionary trust to benefit children or other loved ones, write a Letter of Intent to guide your trustee in exercising discretion when managing the trust property. Tailor it to fit your circumstances and wishes.
Download a Template
Legacy Statement
Write/record a Legacy Statement to share priceless life lessons with your children or other loved ones. Potential themes can include love, family, hard work, faith, education, or some or all of the above. Leave instructions for its release, like dates or milestones (wedding, college graduation, etc).
Download a TemplateMaintain
Maintain your plan so it stays up-to-date as changes occur in your life.
Towards the end of each year, consider whether there have been changes in your circumstances that might impact your plan.
Our Estate Readiness Quiz will help prompt further reflection and indicate when updates are needed.
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