Components of a Basic Living Trust Package

Components of a Basic Living Trust Package

by Randall D. Armour, Esq.

In previous articles I have discussed the many advantages of using Living Trusts as an estate planning tool. If a Living Trust is used, there are additional documents that, if properly coordinated with the trust, will help insure that your estate plan will work properly. Unfortunately, I find that many people who have Living Trusts are missing one or more of these important documents with the result that their estate planning goals will not be completely satisfied.

• “Pourover” Will - A will can be used to transfer assets into the trust after the death of the owner if the assets were not transferred to the trust during the owner’s life. Unfortunately, probate may be required to transfer assets into the trust using the will.

• Comprehensive Transfer Document - A statement of your intent that all of your assets (not just personal property) are owned by the trust. This is a very important document based on a 1993 California case that may allow the transfer of assets into the trust after the owner’s death without the need for probate. I find that very few trust packages that I review include this document.

• Schedule of Assets - A listing of all assets included in the trust. A properly drafted schedule can include all of your assets without listing them individually. This document can also be used to transfer assets into the trust without probate.

• Bill of Sale - Used to transfer personal tangible property into the trust. Generally used to transfer items such as jewelry, furnishings and other household goods.

• Durable Power of Attorney for Financial Matters - This document authorizes an agent to act on your behalf to manage your finances. This can be very useful if you become incapacitated and all assets have not been transferred into the trust.

• Advance Health Care Directive - A statement of your desires regarding end-of-life and other medical decisions and names an agent to make healthcare decisions for you if you are unable to make those decisions for yourself.

• Community Property Agreement - Allows a surviving spouse to receive a full step-up in tax basis for appreciated property upon the death of one spouse. This may result in a substantial tax savings for the surviving spouse upon the sale of certain assets. Your specific situation must be analyzed to determine if this document is appropriate for you.

There are several other documents that should be considered when drafting your estate plan. It is extremely important that your estate plan is drafted only after a personal consultation with an attorney so that the plan can be customized according to your specific needs and desires.

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This Article is designed to be of general interest and is not to be construed as legal advice. Before acting on any matter contained referred to in this article, please consult with your personal legal adviser.