Setting Your Trustee Up for Success


For many people, a revocable living trust is a valuable tool to ensure that their finances are well managed during periods of incapacity and that their loved ones are financially secure upon their passing. However, signing the trust agreement doesn’t end the estate planning process: To work properly, your assets need to be aligned with the trust, often called funding your trust.

What Is Asset Alignment?

Asset alignment is the process of transferring the ownership of accounts and property to the trust during your lifetime. Or it could be the process of designating the trust as a beneficiary of an account or piece of property so that the trust will receive ownership upon your passing.

Asset alignment as a First Step for Trust Administration

Aligning your assets with your trust not only avoids the dreaded probate process, it can also make the trust administration process much easier.

  • Accessing your accounts and property will be less complicated. If you have aligned your assets with your trust, your successor trustee should have little or no trouble stepping in to manage the accounts and property if you are unable to do so. This can be incredibly important if you are incapacitated and action must be taken right away. Your successor trustee may need to provide third parties with documentation proving their authority to act on behalf of the trust, but we can easily prepare this documentation for you without court involvement.

  • Creating the inventory for your trustee. One of the first things your successor trustee must provide your named beneficiaries at your passing is a comprehensive inventory of all the trust’s accounts and property. If the information gathered during the asset alignment process is kept up to date, you will leave behind a helpful preliminary list for your trustee to use. This can save the successor trustee a lot of time in the beginning stages of administration.

  • Confidence that your plan will be carried out. If an account or piece of property is not owned by the trust, the instructions in the trust agreement will not matter. If the item is not controlled by a beneficiary designation or joint ownership, it will go through the probate process. At best, the property will be transferred into the trust through a pour-over will. At worst, the court, relying on state statute setting forth a default method for dividing your money and property among specified heirs, will distribute the account or property to a family member you might have otherwise wanted to disinherit. If a beneficiary has been named on an account or piece of property, it does not matter what your trust agreement says, it will go to whomever is listed on the beneficiary designation. The same is true with joint tenancy. Joint tenancy means that the other owner will automatically receive 100% of the interest in the account or property upon your death.

Working Together Now for Future Success

You obviously care deeply for your loved ones: Otherwise, you would not have taken the time to create an estate plan. The last step you need to take is to align your assets with the trust. Please call us at (423) 648-9829 if you have any questions about the process. Or schedule an appointment. We are available via telephone call, video conference, or in person to assist you in any way you may need. If you would like, we are also available to do the asset alignment for you. Let’s work together to make sure that your estate plan will work the way you want when you need it to.

For more information, contact us

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24 Peavine Plaza, Suite 101

Crossville, TN 38571 (855) 812-1856

 

1200 Mountain Creek Road, Suite 485

Chattanooga, TN 37405 (423) 648-9829

info@epctn.com

 

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