Despite the do-it-yourself books and on-line documents available on the internet, it is a very bad idea for a layperson or for that matter an inexperienced attorney to set up a living trust.
A qualified estate planning attorney can draft the trust agreement and supervise the (i) execution of the document and related estate planning documents and (ii) the funding of the trust.
This latter task (funding the trust) is fundamental for a living trust to be an effective estate planning tool. Too often an expensive estate plan is set up for a client but it is not properly funded. In fact, some estimates indicate that more than 50 percent of living trusts are unfunded. During the lifetime of the Grantor, only those assets placed in the trust will be controlled by the trust.
For example, absent other competing consideration (e.g., asset protection concerns or special issues concerning qualified retirement plans) titling real estate, bank accounts, CDs, mutual funds and other securities in the name of the trust is important to achieve the two principal goals of a living trust, namely (1) planning for your incapacity during your lifetime and (2) avoiding probate upon your death. If it is not advisable to place certain assets in the trust when it is established, then other techniques are available to assure that assets are placed in the trust at the death of the Grantor without utilizing probate (e.g., transfer on death designations).
Why leave your legacy to chance? Our estate planning attorneys can help you explore the best options. To schedule an appointment, contact our office through the form below or call us at 816-561-5000.
*This post was originally published on September 28, 2011
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