Readers of this blog may take comfort in knowing that they have prepared an estate plan. However, a recent article suggests that many individuals have not communicated those plans to their loved ones.
In this era of technology, a search for a physical document, such as a will, should be unnecessary. Yet what option remains if beneficiaries do not know about a grantor’s documents?
As a law firm that focuses on estate planning, we have helped many clients prepare up-to-date plans. Part of that process includes accounting for accessibility. Designating a trustee or a power-of-attorney can be easy solutions to a communication gap. Such individuals will have an affirmative, fiduciary duty to contact beneficiaries and/or act in accordance with the instructions in the legal documents.
When it comes to designating a trustee, however, some individuals may have misgivings about giving up control over their assets. For such clients, we might recommend a revocable living trust. Individuals can freely transfer assets in or out of this type of trust during their lifetimes, even serving in all three roles of grantor, trustee and beneficiary. Upon the grantor’s passing, however, the trust usually becomes irrevocable, and the named successor trustee will take control of managing the trust for the benefit of the beneficiaries.
A final word of caution: It might be a mistake to use a revocable living trust as a will substitute. Although the grantor retains control over trust assets, any asset transfers to the revocable living trust must be specifically named. For that reason, our estate-planning attorneys might recommend a pour over will to account for any forgotten assets in a revocable living trust. The will could also name the revocable living trust as the principal beneficiary. To learn more about this approach, check out our firm’s estate planning website.
Source: The Street, “5 Biggest Estate Planning Mistakes You Can Make,” Jason Notte, July 13, 2015