A crucial step in establishing a revocable living trust is to ensure that the appropriate assets are re-titled in the name of the trust. Failure to do so may require the Executor or Personal Representative of your estate to initiate a probate proceeding to distribute your remaining assets.

The current Covid-19 pandemic highlights yet another reason to avoid the probate process altogether. The current crisis has forced many courts across the US to close or severely limit their operations, making it nearly impossible to go through the probate process.

If a probate proceeding has not yet been started, your beneficiaries or heirs may need to delay the already time-consuming probate process even longer. If a probate proceeding has already started, but the Executor or Personal Representative in charge of administering your estate becomes incapacitated or is no longer able to act, there may be a significant delay before a successor can be appointed to complete the administration of your estate.

Key takeaways:

1. Utilize a revocable living trust to transfer assets to your beneficiaries.

2. Ensure that your assets are properly re-titled in the name of your trust.

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The coronavirus pandemic is a good reminder of the importance of having your estate plan prepared. Here are the basic documents you should have in the event you become incapacitated or pass away.

Durable Power of Attorney

The agent that you select under a durable power of attorney can generally take care of your financial affairs if you are no longer able to act for yourself. The agent may be able to transact with financial institutions on your behalf as well as to sign legal paperwork or file your taxes.

Advance Health Care Directive

Like the Durable Power of Attorney, the Advance Health Care Directive allows you to select an agent to make health care decisions for you. The agent can also speak to medical professionals on your behalf. Due to privacy laws surrounding medical information, this document may be the only way anyone can get information about your health situation.

Revocable Living Trust

Most estate plans today utilize a revocable living trust to avoid the various hurdles of the costly and time-consuming probate process at the time of your death. The revocable living trust also has the added benefit of providing a plan for the management of your trust assets in the event that you become incapacitated. The key to utilizing a revocable trust effectively is to ensure that appropriate assets have been properly transferred to your trust.

Will

For most people, the revocable living trust is the primary document that describes how their assets are to be distributed. However, Wills are still prepared as part of a complete estate plan and are usually where guardians for minor children are nominated. Typically, clients who have a revocable living trust also have an accompanying “pour-over” Will that states that any assets that the client may have forgotten to put into the trust while they were alive be put into the trust after their death. The person in charge of carrying out the wishes in your Will is known as the Executor, and is often the same person as the successor Trustee of your revocable living trust.

Transfer / Title Documentation

If you have a revocable trust as part of your estate plan, you should also make sure that any bank and investment accounts, real estate, or any other asset (other than retirement accounts and life insurance policies) are re-titled in the name of your revocable living trust. This will ensure that those assets will be distributed in accordance with your trust rather than your Will (the latter of which may require a probate proceeding).

Beneficiary Designation Forms

Some assets are only distributed by way of beneficiary designation forms. Typically, life insurance and retirement accounts (e.g., IRAs, 401ks, SEP-IRAs, etc.) fall into this category. It is therefore critical that you review these from time to time to make sure that you’ve named the appropriate beneficiaries.

Asset List

This is rarely mentioned, but practically speaking, simply putting together a list of your assets can be immensely helpful to your Trustee, Executor, or beneficiaries. Often, when a person dies, his or her family members do not know where to look for the assets. A simple list with information such as the address of any real estate that you own, the places where you have banking or investment accounts, or the legal names of the businesses that you own can greatly reduce the burden faced by your loved ones.

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