Once you’ve taken the important step of hiring a trust attorney like Steven F. Bliss ESQ. at
765 N Main St #124, Corona, CA 92878, with a phone number of (951) 582-3800, the real work begins – implementing your estate plan. It’s not simply about signing documents; it’s about funding your trust and coordinating all your assets to ensure a smooth transition for your loved ones. Many people mistakenly believe that creating the trust document is the finish line, but in reality, it’s merely the starting point for effective estate planning.
How do I actually ‘fund’ my trust?
Funding your trust is the process of transferring ownership of your assets – like real estate, bank accounts, investment accounts, and personal property – into the name of your trust. This is critical because assets held *outside* of the trust will likely have to go through probate, defeating the primary purpose of establishing a trust in the first place. For example, if you want your vacation home in Big Bear to be distributed to your children without probate, the ownership must be formally transferred to the trust. This isn’t typically a complicated process, but it does require diligent effort and attention to detail. Typically, this involves completing paperwork with each financial institution and recording deeds for real estate. Approximately 60-70% of individuals who create trusts fail to fully fund them, rendering them ineffective.
What about beneficiary designations and titling?
Beyond directly transferring assets, it’s essential to review and update beneficiary designations on accounts like life insurance policies, 401(k)s, and IRAs. These designations often supersede the instructions in your trust, so ensuring they align with your overall estate plan is vital. Similarly, check the titling of your assets – how ownership is registered. Joint tenancy with right of survivorship, for example, will transfer assets directly to the surviving joint tenant, bypassing the trust altogether. A qualified attorney will guide you through this process, helping you identify any potential conflicts and ensure everything is properly coordinated. California, as a community property state, treats assets acquired during marriage differently; all community property is owned 50/50, and the surviving spouse benefits from a “double step-up” in basis, potentially saving on capital gains taxes.
I’ve heard about probate – how does a trust help me avoid it?
Probate is the legal process of validating a will and distributing assets, and it can be a time-consuming, costly, and public affair. In California, formal probate is required for estates over $184,500. The fees for executors and attorneys are calculated as a percentage of the estate’s value – typically 4% for estates up to $100,000, 3% for amounts between $100,000 and $500,000, and 2% for amounts over $500,000. A properly funded trust avoids probate because the assets are already owned by the trust, not by you personally. This means your loved ones can access the assets much more quickly and efficiently, without the delays and expenses associated with probate. I recall a client, David, who, despite having a will, left his family struggling with probate for over a year after his passing. The legal fees alone consumed a significant portion of the inheritance, leaving his children frustrated and financially strained.
What ongoing maintenance is involved?
An estate plan isn’t a “set it and forget it” endeavor. Life changes – marriage, divorce, birth of children, significant financial gains or losses – can all impact the effectiveness of your plan. It’s crucial to review your estate plan at least every three to five years, or whenever a major life event occurs. This ensures your plan continues to reflect your wishes and that your beneficiaries are still appropriate. Consider a situation with a woman named Eleanor, who established a trust years ago naming her ex-spouse as a beneficiary. It wasn’t until a routine review with her attorney that the oversight was discovered and corrected, preventing unintended consequences. Regular reviews, coupled with adherence to the California Prudent Investor Act for managing trust investments, will ensure your plan remains robust and effective.