If you have already set up your living trust, that is a great step towards ensuring that your assets will be protected from government interference and your wishes will be carried out in the event of your incapacity or death. Once you sign your trust, there are a few checklist items you want to complete.
- Ensure your assets are titled in the name of your living trust. This means your home, checking and savings accounts and investments. If you have set up a trust with us, we do take care of transferring the title of your home into your trust. In the event you refinance your home in the future, please note that banks tend to take your property out of your trust and title it in your individual name. It is crucial that you ask them to properly title it back in the name of your living trust. If you are unsure, please contact us at (714) 372-2215 and we can do a title search for you. As for your bank accounts, you want to make sure you have updated the title to your bank accounts. If you have a financial advisor, it is important that you notify them that you have set up an estate plan.
- Make sure you have beneficiaries on your retirement accounts, such as your IRAs and 401Ks. This would be accomplished by completing the Beneficiary Designation Form that is provided by the financial institution.
- Make sure you have named beneficiaries on your life insurance policy. Most married couples will name their spouses as the primary beneficiary but will forget to name a secondary beneficiary. Make sure you have contingent beneficiaries. You could name your living trust as a beneficiary if you wish.
Now that we have discussed what you need to do after you establish your living trust, we also want to talk about what you do not have to do. These are some of the common misconceptions we come across that we wanted to address:
- You do not have to register your trust with the IRS or record it with the County Recorder’s office. Your trust is a private document.
- You do not necessarily have to retitle your car in the name of your trust. Most of us have cars that depreciate in value. However, if you are a car enthusiast and you own classic cars that are worth $150,000 or more, then you should retitle them in the name of your trust.
- You do not have to obtain a separate tax identification number for your revocable living trust. All income and loss from your trust assets will continue to be reported under your own individual state and federal tax returns. Your bank accounts should continue to remain under your own social security number. (The IRS doesn’t treat your living trust as a separate entity from you because it can be revoked at any time.) Your trust will need a tax identification number only upon your passing.
It is important to note that the information we have shared in this article applies only to revocable living trusts. Therefore, if you have an Irrevocable Trust set up, then different rules might apply. In the event you have a question regarding your own estate plan, please do not hesitate to contact us at (714) 372-2215 or via firstname.lastname@example.org so we can review the terms of your own individual trust.