Checking Accounts/Savings Accounts/CD’s/Stocks/Mutual Funds: The name of the current owner on these assets will change to the name of the Trust.  You will probably  have to do this in person for checking accounts and savings accounts as the bank will want you to sign a new signature card.  Instead of signing the checks as Joe Smith you will sign them as Joe Smith, Trustee.  Before doing this with your CD accounts, check with the bank if they will impose a penalty if you transfer it before the period has run.

L ife Insurance: You will remain as the named owner on the Life Insurance Policy.  You will request that the Revocable Living Trust be named as the beneficiary.

Annuity:  It is recommended that if you are married that the spouse remain as the primary beneficiary and if you have children, they should be named as secondary beneficiaries.  This is due to the fact that there are certain options available to a spouse that are not available to a Living Trust.

IRA: If between a husband and wife, then  the ownership must remain in the name of one of the spouses and the primary beneficiary as the surviving spouse.  The Revocable Living Trust can be made the secondary beneficiary.  You MUST check with your CPA to determine if there are any income tax consequences to these changes.

Personal Property: Typically any property that does not have a physical title (such as household furnishings, jewelry, clothes, etc.) is handled by a document called “Assignment of Furniture, Furnishings and Personal Effects”.  This document is signed at the time your Revocable Living Trust is signed.  Not only does it transfer the assets you currently have into the Revocable Living Trust but it also transfers any future property of that nature.

Real Property:  The deed will be re-recorded with the name of the Revocable Living Trust as the owner.  You should contact you insurance company prior to making this change to determine if they will allow a Revocable Living Trust to be a secondary insured on the policy.  You should check with your mortgage company as well.

The greatest fallacy most people have about estate planning is the belief that if they die intestate (or without a will) all of their property will go to their spouse.  In fact, it is this belief that keeps many people from creating an estate plan until after one spouse dies.  But this is not necessarily true.  What happens to your estate depends on many factors, including the state in which you live, whether you have children, your marital status and whether you’ve been married before, etc.  There is absolutely no one answer to the question “What happens if I die without a will?” Are you sure you want to take your chances with what might happen?

Another issue that most people just don’t understand is that probate is more often than not a very time consuming and expensive process.  There is a good likelihood that your loved ones will need access to your estate in the months following your death—unfortunately they are not likely to get it!  Probate court calendars, informing creditors, looking for other possible heirs, other family members contesting decisions—all of these and more can keep your estate tied up in probate for months or years, and unavailable to the people who need it most.

And perhaps the least understood drawback to refusing to create an estate plan in a down economy is that the probate courts may force your heirs to sell valuable assets at a time when property values are at their lowest. This alone could result in significant losses to the estate you pass on to your beneficiaries, not to mention probate fees and estate taxes that could have been saved had you planned ahead.

Estate planning may feel like an unnecessary expense, but the more you understand the more you realize just how essential it is.  Creating your estate plan now could be the best investment you make in your family’s future.