Law Offices of
Michael S. Harms

SOME SIMPLE FACTS

• Transferring Assets into the
  Living Trust

  With few exceptions, it is absolutely imperative that all your assets be transferred into the Living Trust. The primary exceptions are retirement plans and life insurance policies, which are discussed in detail in our instructions that accompany your Living Trust.
  
  This process of transferring your assets into your Living Trust is called “funding” the trust. Many people are concerned that when an asset is transferred into a Living Trust control over that asset is lost. That is not true. In fact, in a properly drafted Revocable Living Trust, you retain complete control of all your assets transferred into the trust.
  
  The same principle applies to the transfer of your real estate, stock, and any other assets which you own. You transfer assets into your Living Trust by simply changing the name on the document of title for that particular asset.
  
  The transfer of assets which were not properly titled in the name of the Living Trust is the primary purpose of the Pour-Over Will, which is just a standard Will that leaves i.e. pours-over, all your assets into the Living Trust. If the Pour-Over Will is invoked because an asset was left outside of the Living Trust, then for that asset, the costs and time delays of the probate process will have to be incurred.
  
  The goal, therefore, is to never use the Pour-Over Will. If all your assets are properly titled i.e. transferred, into the name of your Living Trust, then the Pour-Over Will would not be used, and thus there would be no probate.
  
  GENERALLY YOU SHOULD TRANSFER ALL YOUR ASSETS INTO YOUR LIVING TRUST. THE POUR-OVER WILL IS JUST A SAFETY-NET TO CATCH THE ASSETS YOU FORGOT TO TRANSFER INTO YOUR LIVING TRUST.

• Distribution of the Trust Estate

  Upon the death of the surviving spouse or single person, the successor trustees first job is to make an inventory of all the assets noting their description and values at the date of death.
  
  For estates which are to be fully distributed upon the death of the surviving spouse or single person, the successor trustee then generally will propose a distribution plan pursuant to the terms of the Living Trust. It is a good idea to get in writing each of the beneficiaries approval of the proposed distribution plan prior to making any distributions. This will avoid the situation where the successor trustee distributes the assets among the beneficiaries, and then finds one or more beneficiaries complaining about how the assets were distributed.
  
  If you desire for certain assets to go to certain beneficiaries, then you simply need to describe those assets in detail and provide the name of the intended beneficiary on our questionnaire. In this event, prior to making the distribution of the estate by percentages, the trustee will distribute the specific assets you have described to the named beneficiaries.
  
  For estates which are to be administered (e.g. where the beneficiaries have not attained the age set for distribution in your Living Trust), the successor trustee needs to notify each of the financial institutions to have the successor trustee’s name put on the account signature cards. The successor trustee then continues to manage the assets in your Living Trust for the benefit of your beneficiaries making periodic distributions pursuant to the terms of your Living Trust until such time that your Living Trust requires complete distribution.
  
  UPON DEATH OF THE SURVIVING SPOUSE OR A SINGLE PERSON, YOUR SUCCESSOR TRUSTEE WILL EITHER DISTRIBUTE ALL OF YOUR TRUST ASSETS OR RETAIN AND MANAGE THE TRUST ASSETS FOR YOUR BENEFICIARIES.